30.11.202010:25 Forex Analysis & Reviews: Precious metals market is experiencing a black streak

The price of gold continues to plunge on Monday morning and is already close to its lowest levels in recent months. The current drop can already be called the strongest in the previous four years.

The price of gold futures contracts for February delivery on the electronic trading platform in New York sank by 0.89% or $15.8. Thus, its current value is $1,772.3 per troy ounce.

The price of silver futures contracts for March delivery on the same trading platform fell even more by 2.69%, which forced it to move to the level of $22.032 per troy ounce.

The last days of November were not very successful for gold. Market participants began to gradually lose interest in the precious metal, giving their preference to the sector of risky assets. The concerns related to political instability in the United States of America, which seriously worried investors, have disappeared. In addition, a wave of optimism covers the market against the background of better prospects for growth, and recovery from the crisis caused by the impact of the coronavirus pandemic, the global economy in general, and the economy of individual regions in particular. News about the stages of development and preparation for entering the broad markets of the COVID-19 vaccine supports the positive mood. Perhaps, advances in the development of a drug that can cope with the pandemic affect the precious metals market in the most negative way. Even the weakening of the US dollar is not able to provide it with proper support.

To date, gold losses have already amounted to more than 5.5% of the value that has been held throughout the current month. Analysts point to the fact that the reduction is the most significant in the last four years. Something similar was observed back in 2016. It was then that the price of the precious metal sank so seriously that it then led to a long and unstable recovery process.

The vaccine may be the lifesaving pill that investors in the markets have been waiting for almost all this year. At the very least, it is a great uplifter, making us hope for a rapid economic recovery. At the same time, interest in safe assets is almost completely undermined. The "safe haven" of gold is no longer needed. The possibility that market participants will reconsider their views in the near future is very small, but the fact that the hype around the release of the vaccine will soon subside and we will have to look at things realistically is quite justified. Of course, this will not allow gold to quickly recoup its losses, but it will still be able to strengthen at least a little.

Several pharmaceutical companies across the globe have now announced the successful completion of the last stage of clinical trials of the coronavirus vaccine. According to the UK-based company AstraZeneca, the effectiveness of its drug ranges from 70% to 90%. Earlier, Moderna, Pfizer, and BioNTech announced their developments. Their vaccine showed an intermediate result of more than 90%. So far, everything is going more than well for the fight against the pandemic and extremely unfavorable for the gold market.

However, what is negative for gold is very well supported by another metal – copper. Once again, this precious metal has demonstrated an extremely positive attitude, which is provided by the already known hopes for a speedy recovery of the global economy. However, even more interest in copper is fueled by news on statistics from China – the main consumer of copper in the world. According to the latest data, the index of business activity of the industrial sector in the country for the last month of autumn increased to 52.1 points, while earlier it was 51.4 points. Activity is growing, which means that the demand for the metal is also increasing.

The price of copper futures contracts for March delivery increased by 1.87% on Monday, which allowed it to take a fairly high position at $3.4815 per pound. At the same time, experts are almost sure that the growth will continue.