Gold prices suffer worst weekly drop since September

For the week, it lost 3.4%, its highest for a week since late September.

By Olumide Adesina

Gold prices lost some of its blinks at last week’s trading session cumulatively. For the week, it lost 3.4%, its most for a week since late September.

What we know: New York-traded gold for December delivery settled up 0.7% at $1,886.20.

That said, its gain recorded in the last trading session, couldn’t prevent it from posting its worst weekly loss since September, triggered by early selling in the week after market hype that showed Pfizer’s COVID-19 Vaccine was, what the world was waiting for.

What this means: Investors’ of late have been trooping into riskier assets like global stocks on the bias that Pfizer’s COVID-19 vaccine would provide a lifeline to the world’s economy, triggering the precious metal to lose 4.5% at the early part of the week.

Investors’ over-exuberance with progress reported by Pfizer on its Covid-19 vaccine trials triggered a massive rally in risk assets on Monday that led to a 4.5% plunge in gold — the safe-havens worst day since August.

Stephen Innes, Chief Global Market Strategist at Axi, in his weekly closing remark hinted Nairametrics why the precious metal is presently under pressure.

“Gold remains an asset looking for a purpose. US Treasury yields dropped overnight. The dollar was relatively flat again. The EURUSD and Gold traded flat, so by all accounts, gold is little more than a mirror reflection of the EURUSD these days while trying to find a new narrative to ride between now and a possible inflationary wave later in 2021.

What to expect: In the midterm, gold prices will likely be supported on the reports showing the effect COVID-19 infections are having presently on the Northern Hemisphere, coupled with U.S president Trump legal battles on the recently concluded election.