Gold rising7 Dec 2020 22:40
Gold out look bullish even with the vaccine
Vaccines are actually good for gold prices? $GOLD The outflow of safe-haven assets such as gold may be misled by the vaccine. With the rise in risk sentiment and the rebound of the US dollar, the price of gold fell sharply, hitting a new low since late July, and once fell below the psychological barrier of US$1,800. A series of good news about vaccines has been suppressing the price of gold, but TD Securities pointed out that the outflow of funds from safe-haven assets is "misguided": "We reiterate that it is wrong to withdraw funds from gold ETFs. The vaccine will ultimately bring good news to gold investors. Under the Fed's flexible average inflation target system, the Fed will try to stimulate inflation to exceed the target for several years. Plus nominal interest rates Keeping basically unchanged, the vaccine should help push up inflation expectations, thereby benefiting gold prices." 1. Investors are "led away" by the vaccine and ignore a major anomaly The market only saw the positive side, but did not consider the problems encountered in the widespread distribution of vaccines. The high risk sentiment of ordinary investors is completely out of touch with the development path of vaccines. After all, the storage and transportation of vaccines are very complicated. For the rest of 2020, investors will continue to struggle between the hope of vaccines and the rising number of cases. Since the outbreak in the United States, new cases in November have accounted for about a quarter of the total new cases. The medical system is under tremendous pressure. At least 83,000 patients with new coronary pneumonia are hospitalized, and this number continues to rise. Strangely, risk appetite is heating up. Bank of America’s monthly survey report shows that the level of cash in the portfolio has dropped to 4.1%, the lowest level since January. Cash level refers to the percentage of total mutual fund assets held in the form of cash or cash equivalents, and is an important aspect of maintaining mutual fund liquidity. Most mutual foundations maintain a 5% cash level in order to process transactions and daily liquidation operations. $ 2. The actions of the Federal Reserve are the number one factor leading the price of gold Whether the vaccine market will continue or stop in the next few weeks is still unknown. But it is clear that a lot of good news has been digested early, but the economic damage caused by the second and third waves of the epidemic has not yet appeared. Fiscal and monetary policies should continue to play an important role in preventing a deep recession, and investors should pay close attention to the actions of fiscal and monetary policymakers until we are confident that the economy can operate on its own without assistance. 3. The vaccine can kill the virus, but it can't kill the huge debt.
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