Gold price dropped more than $8 in the last hour of trading as news of a breakthrough in the coronavirus vaccine hit headlines. XAUUSD initially hit an intraday high at $1,562.30 and is now trading at $1554.50.
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According to Sky News, UK-based scientists are now ready to test their coronavirus vaccine on animals as early as next week. It may still take months for them to be able to test it on humans. The breakthrough is that the time it took to develop the vaccine is significantly lower. It is down at 14 days from the average time of two to three years.
In a separate report, Chinese media announced that scientists from Zhejiang University has an effective drug that can readily be used to treat infected patients. More details about the report have yet to be disclosed. However, it seems to be enough to push XAUUSD lower in today’s European session.
This news is bearish for XAUUSD because risk aversion often highlights demand for safe haven assets like gold. These developments, therefore, alleviates investor concerns and encourages market participants to seek higher-yielding assets.
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Gold Price Outlook
On the daily time frame, we can see that gold price is currently testing its previous highs for support. Reversal candles around this price, $1,554.50, may indicate that there are still buyers looking to push gold price to its recent highs around $1,591.46.
On the other hand, if risk appetite is sustained, a close below yesterday’s low could trigger a sell-off to $1,523.00. This price coincides with the rising trend line (from connecting the lows of May 20, May 28, November 29, and December 12). It also looks like the 100 SMA aligns with the trend line at this price.More content
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