Gold recovered slightly on Tuesday after the great decline it recorded yesterday, which caused gold to drop to its lowest level in five weeks, and this comes with the continued selling of the precious metal in favor of stocks.
Gold prices rose today to record a high of $1890.32 an ounce, after it opened at the level of $1862.21 an ounce, and prices are currently trading at the level of $1874.75 per ounce.
Yesterday, gold prices fell by more than 5% to record their lowest level in five weeks at $1850.31 an ounce, after gold recorded at the beginning of yesterday's session its highest level in seven weeks at $1965.43 per ounce.
The crash in gold prices yesterday came after Pfizer announced that the Covid-19 vaccine, jointly developed with BioNTech, had a 90% efficacy and the news sparked optimism that the economic recovery is finally on its way.
Investors preferred to give up gold quickly, being a safe haven asset in the financial markets, in favor of investing in stock markets, which led to a sharp drop in gold prices.
With the beginning of today's session, gold prices witnessed an upside correction due to profit-taking operations after gold prices fell yesterday, in addition to questions in the market about the speed of deploying the new vaccine to masses, its supplies, safety factor and other details that have not been announced yet.
The positive momentum that gold is trying to gather today after yesterday's decline comes from the hopes of the Democratic Party's ability to pass the US stimulus, which would weaken the US dollar and thus brings gold back to the rise again.
Robert Kaplan, Chairman of the Federal Reserve Bank of Dallas, stated that although the US economy has recovered from severe contraction, the resurgence of Corona cases poses downside risks.