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The Impact of COVID-19 Vaccine Development on Gold Prices

a stack of shiny gold Bullions with their branding on it

The COVID-19 outbreak and its consequences have led healthcare and pharmaceutical companies to develop a safe and effective vaccine to eliminate the infection.

Fortunately, this worldwide endeavor is now bearing fruit as new companies continue to emerge with their 3-phase studies on their particular vaccines.

Among the multiple authorized vaccines under development, Pfizer.Inc and BioNTech have successfully concluded their third phases, proving their vaccines’ efficiency against the virus.

In November 2020, both companies announced the financial efficacy status of their mRNA-based COVID-19 vaccine. They concluded that the vaccine meets all the primary efficacy endpoints at a 95% rate.

This wave of optimism drove the gold prices arbitrarily below the $1,900/ounce price levels, which had hit an all-time high in August 2020 with the virus’s spread.

While IRA companies continue assisting investors on how to invest in gold, it’s critical to learn the prospects for gold prices with the possibility of economic stability. Here’s how the vaccine development is impacting gold prices today.

A Price Decline

Since the announcement of the vaccine development, the market has witnessed a decline in gold prices for two straight weeks.

The hope for a virus vaccine may have curbed the demand for safe-haven among investors who choose to diversify their portfolios during economic downturns.

The COVID-19 vaccine indicates steady US economic growth. The declaration of the COVID vaccine’s efficacy led to a 1.8% decline in spot gold.

In fact, gold trading has been lower than its 50 and 100-day moving day average, as it broke through its $1,850 support level. 

A U.S Treasury Gain

The COVID-19 vaccine also escalated the US Treasury profits to the highest point since the start of the pandemic.

The gains have been more than the treasury’s 10-year average, which is impressive growth compared with other global stocks.

However, this gradual economic growth may also cause the precious metal to fall below $1,800. Gold traders now expect Joe Biden’s presidency to stabilize gold’s price as soon as it comes into effect.

Stimulus Packages as a Hope to Keep the Prices High

Two of the factors that drove the gold prices to an all-time high during the pandemic were increased government spending on public healthcare and stimulus packages.

The second COVID-19 wave along with its multiple variants depicts a new stimulus package to be on its way.

The reports on the Democratic party’s agenda include the fragile economy’s bail-out through stimulus package distribution. The implementation of this strategy could help recover gold prices by the end of January 2021.

However, if the economy continues to reflate, the US Central Bank may have to increase interest rates to keep the gold prices afloat and investors’ interest intact.

Despite the uncertainty of gold prices due to the COVID-19 vaccine, gold remains a safe-haven asset due to its financial security and inevitably increasing value around the world.

Let us at Orion Metal Exchange help you make smart investments by buying gold and silver bullion and creating self-directed IRA accounts to have the retirement savings that you deserve. Connect with us today!

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