The gold price was hit yesterday by news of the almost imminent release of a Covid-19 vaccine. Investors are now betting on a shorter crisis than previously expected with the coronavirus curse seemingly over within 12 months but is there too much optimism?
Markets reacted with significant rallies in all sectors, while bullion sharply declined by around $100. In just a few hours the price plummeted from $1,960 to a new test of the support level at $1,850. It seemed that at this point investors realized that central banks will still be forced to print money and the crisis is not over yet. Bullion rebounded once again, managing to keep alive the lateral trading range of the last few months between $1,850 and $2,070. A clear fall below $1,850 would represent a negative signal, while the first resistance level on the daily chart still seems to be placed at $1,930. Despite yesterday’s drama, the price may yet still remain in the lateral phase of the last few weeks.
