In the uncertainty of the atmosphere still plagued by US Presidential election sentiment, the market was shocked by the drastic drop in gold prices in the European session yesterday.
On the XAU / USD price chart, the price has plummeted up to 1,000 pips from the highs around 1960.00 reaching the support level of 1850.00.
What exactly has happened that caused the gold price to fall?
This is driven by news regarding the development of vaccine production tests that are back in the market.
The Covid-19 vaccine co-produced by Pfizer and BioNTech states that based on the test, the effectiveness of the vaccine reached up to 90%. This very high percentage figure has returned to boost investor confidence in the global economic recovery.
With the production of vaccines that are almost perfect, it will certainly give an idea for pandemic prevention in a timely manner while restoring economic activity around the world.
As a result, rising investor confidence has prompted the release of safe-haven assets which had previously been the focus during uncertain market conditions.
After a drastic drop in the XAU / USD chart to the 1850.00 level, the price rebounded to close the New York session trading higher and again tested the focus level of 1875.00 in today's Asian session (Tuesday).
Investors who are now beginning to shift their focus to vaccine sentiment will see gold trading continue to decline to lower levels today.
A drop in the price of gold below the support level of 1850.00 is seen to lead to the support zone of 1800.00.
