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Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 70.69% of retail investor accounts lose money when trading CFDs / Spread betting with this provider. You should consider whether you understand how CFDs / Spread betting work and whether you can afford to take the high risk of losing your money.
Important Notice - Scam website
Important Notice - Fraud awareness
The vast majority of retail investor accounts lose money when trading CFDs / Spread betting with this provider.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail investor accounts lose money when trading CFDs / Spread betting with this provider. You should consider whether you understand how CFDs / Spread betting work and whether you can afford to take the high risk of losing your money.
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    XAUUSD: Gold prices at risk of crashing to $1727 on Moderna vaccine breakthrough

    Once again, the Gold price is under pressure as biotech firm Moderna (Nasdaq: MRNA), reports that their Coronavirus COVID-19 vaccine is 94.5% effective. Last week, the gold price slid by 116 USD per ounce on the news of Pfizer’s breakthrough COVID-19 vaccine. As the charts show today, there is a high risk that gold prices (XAUUSD) will crash down, reaching $1727 on a break to the September low of $1847.

     

     

    Learn more about commodities trading with us

     

    Moderna vaccine breakthrough

    Moderna, much like Pfizer, is in the midst of a phase 3 trial, and today, they reported that for a sample of 95 participants, their COVID vaccine was 94.5% effective. The outcome beats Pfizer’s results of 90%. However, the innovation is that Moderna’s vaccine will last up to thirty days in common household fridges, and up to twelve hours at room temperature, beating Pfizer's vaccine which needs to be stored at -70 degrees Celsius, a temperature that most household freezers can’t reach.

    Moderna anticipates to have 20 million doses of their new vaccine ready to ship to the United States by the end of the year and looks to produce another 500 million to 1bn doses in 2021.

     

    What does the Moderna vaccine mean for gold prices?

    The gold price has been gaining sharply since mid-2018. At the start, it was on trade wars, and traders position themselves for an economic slowdown. However, in 2020 the rise in gold prices was due to the COVID-19 crisis management of governments and central banks worldwide.

    They have injected and printed large amounts of fresh money to support their economies, and this has caused gold prices to trade higher. Traders have also lifted gold prices on the haven appeal. However, as we saw last week, on the news of the Pfizer vaccine, gold prices sank, and stock indices rose. The rationale behind this is that investors see less need for aggressive fiscal and monetary stimulus, pulling out the support of gold prices.

    Instead, investors are piling into the beaten shares of companies that looked like they would bankrupt on further lockdowns. Bankruptcy risks are still high, but with two vaccines getting ready to be shipped, and more vaccines on track, it is likely that by the end of next year life will be back to normal, and it is this that stock and gold traders are pricing-in.

     

    Gold price technical outlook

    The position of gold prices is particularly vulnerable following last week’s slide. XAUUSD, bounced from the $1847.39 level on September 24 and 28, and November 9, forming a solid and well-defined support level.

    If we link XAUUSD’s September 16 high of $1973.35, and last week’s high of $1965.49 with a trend line, we can form a descending triangle pattern, with the help of the $1847.39 support level.

    Using this pattern, we can derive a take profit level of $1727.80, on a break to the September low of $1847.39. If the pattern indeed plays out XAUUSD will remain bearish as long as the price trades below this week’s high of $1899.76. If a breakout happens tomorrow, it might improve the risk-reward ratio of this bearish view.

    To see all upcoming news and data releases that’ll have an effect on the financial markets, check out our Economic Calendar. It’ll cover all major releases from global economies and give you the exact time the release is due, the previous data, forecast data and actual data (once released).

     

    How to trade commodities with ATFX

    Looking to trade gold and other commodities? Sign up for a live or demo account with ATFX to get started today. Enjoy competitive spreads, high-quality trade execution, and 24/5 support.

    1. Register for an account or log in to your existing account

    2. Open MT4 either on your desktop or mobile

    3. Search for gold in the market watch or symbols window

    4. Choose your position size

    5. Hit buy or sell, and then confirm the trade

     

    Gold price, XAUUSD, six-hour chart

    Six-hour chart showing gold price (XAUUSD) movements since September 2020 and future projection

     

    Looking for a great trading platform, look no further. MetaTrader 4 is the world's most popular trading platform for a reason. 

    It offers a host of functionality that will boost your trading experience. From advanced indicators to automatic trading as well as alerts and trade signals.

    Last Updated: 16/11/2020

    This market commentary and analysis has been prepared for ATFX by a third party for general information purposes only. Any view expressed does not constitute a personal recommendation or solicitation to buy or sell as it does not take into account your personal circumstances or objectives, and should therefore not be interpreted as financial, investment or other advice, or relied upon as such. You should therefore seek independent advice before making any investment decisions. This information has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. We aim to establish and maintain and operate effective organisational and administrative arrangements with a view to taking all reasonable steps to prevent conflicts of interest from constituting or giving rise to a material risk of damage to the interests of our clients. The market data is derived from independent sources believed to be reliable, however we make no representation or warranty of its accuracy or completeness, and accept no responsibility for any consequence of its use by recipients. Reproduction of this information, in whole or in part, is not permitted.


     

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