Gold price sinks 4%, silver crashes by Rs 3,300/kg as investors liquidate position on positive COVID vaccine data

Precious metal prices came under intense selling pressure after Pfizer reported that its experimental COVID-19 vaccine is found to be more than 90 percent effective in preventing the novel coronavirus infection.  The pharma major is getting ready to file an emergency use application with US regulators later this month.

Investors rushed to liquidate their long position in both gold and silver after the announcement of this news and sent Dow futures higher by 6 percent or 1,690 points.

Markets were higher in the morning and afternoon trade on November 10 as the US dollar was weak. Joe Biden’s win in the US presidential race rekindled hopes of more monetary stimulus measures to revive the economy.

The US dollar index trades unchanged at 92.22 levels against a basket of currencies in the evening session.

MCX iCOMDEX Bullion Index slides 709.08 points, or 4.41 percent, at 15,383.62 at 19:45. The index tracks the real-time performance of MCX Gold and MCX Silver futures.

Sriram Iyer, Senior Research Analyst at Reliance Securities, said, “International and domestic gold prices corrected from the highs of the session after Pfizer and German partner BioNTech said its experimental COVID-19 vaccine was more than 90 percent effective."

Technically, LBMA Gold Spot retreated from resistance zone $1,965-$1,971 levels from where it has given a sharp fall more than 2 percent losses. Downside could see $1,896-$1,874 levels and whereas resistance is at $1,920-$1,938 levels.

Technically, MCX Gold December has resisted Rs 52,500 levels which holds a premium peak and has corrected more than 4 percent indicating a strong bearish move up to Rs 50,400-49,900 levels while resistance is at Rs 51,400-51,800 levels.

International and domestic silver prices reversed gains made in the Monday afternoon trade after the vaccine news.

Technically, LBMA Silver Spot has given sharp correction from $26.00 levels where immediate support is at $24.30-$22.98 levels. Resistance is at the $25.44 level.

Technically, MCX Silver December has corrected more than 5 percent forming a long Bearish Candlestick indicating a bearish reversal, where below Rs 63,500 will continue downside pressure at Rs 60,700-58,600 levels. Resistance is at Rs 64,200.

In the futures market, silver for December delivery touched an intraday high of Rs 66,478 and a low of Rs 61,415 per kg on the MCX. So far in the current series, the precious metal has touched a low of Rs 49,415 and a high of Rs 79,723. While Gold futures for December delivery touched an intraday high of Rs 52,520 and a low of Rs 49,705 per 10 gram on the MCX. So far in the current series, the bullion metal has touched a low of Rs 48,384 and a high of Rs 56,379.

Silver delivery for December contract slumped by Rs 3,335, or 5.10 percent to Rs 62,000 per kg at 19:53 hours with a business turnover of 13,925 lots. The same for the March contract fell by Rs 3,280, or 4.89 percent, to Rs 63,801 per kg with a turnover of 2,311 lots.

The value of December and March contracts traded so far is Rs 7,751.84 crore and Rs 162.96 crore, respectively.

Gold futures for December delivery dropped Rs 2,137, or 4.10 percent, at Rs 50,030 per 10 gram in evening trade on a business turnover of 11,561 lots. The same for February dropped Rs 2,199, or 4.20 percent, at Rs 50,138 on a business turnover of 4,152 lots.

The value of the December and February contracts traded so far is Rs 9,931.02 crore and Rs 665.35 crore, respectively.

The spot gold/silver ratio currently stands at 76.80 to 1 indicating that gold has outperformed silver.

At 1428 (GMT), the spot gold was down 3.54 percent quoting at $1,882.14 an ounce in London. While spot silver slipped 4.34 percent to 24.50/ounce.

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