( Kitco News ) – Once markets get past all the noise, the COVID-19 vaccine is good news for gold, according to TD Securities.
"Vaccine should ultimately be a boon for gold bugs, as the Fed could keep nominal rates capped while inflation expectations could firm further as a result," TD Securities strategists wrote on Wednesday.
The first response to positive vaccine news was a rally in stocks, and bond yields, while the precious metals tumbled down. The reason for that was because markets are beginning to price in the end of the pandemic even though serious questions about the potential vaccine rollout still remained.
"The positive news on the vaccine sent ten-year yields to their highest since the pandemic began. However, the rise in yields has been accompanied by strengthening in equities and tighter credit spreads, keeping financial conditions uber-loose, which raises questions as to why the Fed should intervene," TD’s […]
November 12, 2020 (updated November 12, 2020) Published by StockMan