Welcome to SurvivalBlog’s Precious Metals Month in Review, where we take a look at “the month that was” in precious metals. Each month, we cover gold’s performance and the factors that affected gold prices.
What Did Gold Do in November?
There were many different factors steering gold prices in November, but the two major influences were also the most controversial: the COVID epidemic and the Presidential election.
Gold gained in early November, as COVID infections and deaths rose in the US and Europe. The possibility of a contested Presidential election was an even larger factor in the early November gold rally. Prices were further supported by continued dollar weakness. The gold price weakened as the Democrats failed to capture a majority in the Senate, breaking the “Blue Wave” that some had predicted.
The announcement in the middle of the month of three different COVID vaccines passing human clinical trials sent stocks shooting higher, and depressed safe-haven assets such as the dollar and gold. The last brick supporting gold prices fell when President Trump allowed the GSA to release transition funds to Joe Biden’s team.
Gold dropped more than $100 over the next two weeks, hitting a five and a half month low of $1,770 before the US open on November 30th. November was the worst month for gold in nearly four years.
In contrast, the Dow Jones Industrial Average had its best month since 1987, while the SP 500 and Nasdaq had their best months since April.
Factors Affecting Gold This Month
COVID SECOND WAVE AND VACCINES
COVID infections and deaths surged across the nation in November, once again straining hospitals to the breaking point. Pfizer announced on November 9th that its COVID vaccine had successfully passed human trials. The news sent the Dow 1,300 points higher at the opening bell. Gold fell by $67 at the open. December gold futures lost $98 on the day to settle at $1,854 an ounce. Spot gold closed at $1,863, down $86.
The next Monday, a second successful COVID vaccine was announced by Moderna. This time, the gold market had a muted reaction, leaking $20 lower on other news over the course of the week.
November 23rd saw a third COVID vaccine announced, this time by Astrazeneca and the University of Oxford in the UK. Gold investors, shaken by a new vaccine being announced three weeks in a row, headed out the door and into the stock market. By Black Friday, gold prices had fallen another $90 an ounce, breaking below the important $1,800 level.
The economy is expected to rapidly recover as vaccines roll out.Continue reading“November 2020 in Precious Metals, by Steven Cochran”