- Gold and silver maintain upward momentum supported by market data.
- Moderna’s coronavirus vaccine progress contributes to gains.
- Economic gains may curtail gains.
Gold and silver prices are off to a great start this week thanks to renewed optimism in the market following reports that Moderna Inc (NASDAQ:MRNA) achieved a significant breakthrough with its COVID-19 vaccine. The two metals also gained thanks to the ongoing trade tensions between China and the U.S, which encouraged traders to look for less risky investments. This allowed gold and silver to be a favorite for many because they were used as safe havens. However, the news of Moderna’s breakthrough encouraged some gains in the stock market while slowing down gold’s gains.
The gold and silver chart indicates the effects of the Moderna news on gold as investors gained confidence in the stock market. The price of gold is expected to reach the $1759.02, $1764.89, $1780.76, and $1796.51 if it trades long above $1750.87. In case the price movement is short below $1750.87, then its key target levels will be $1727.34, $1721.14, $1705.51, and $1683.66. Meanwhile, key target prices for silver are set at $17.53, $17.94, and $18.29 if it trades long above $17.33. Silver prices remain weak bullish on Tuesday morning.
There was a strong rise in the gold/silver ratio over the past few weeks as the coronavirus continued to tighten its grip on the markets. The viral threat has weighed heavily on the U.S labor market, while market data for the U.S industrial production and retail sales highlight the massive impact of the coronavirus on the markets. Some analysts predict that the continued negative impact on the markets will push gold prices to a new historic high at around $1,900 per ounce.
Meanwhile, the Federal Reserve is doing all that it can to ensure economic recovery. This includes slashing rates to zero. The Fed might also roll out additional monetary stimulus in the near term. This may aid the U.S dollar’s recovery, but it might also curtail gold’s gains because it will encourage investors to shift back to fiat.