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Gold Swings Up and Down Based on the Latest COVID-19 News (or Rumors)

Gold rebounded early Monday, November 16, to nearly $1,900 per ounce ($1,897.20) as the U.S. dollar weakened. The move marked a recovery from its sudden $100 drop a week before, when Pfizer announced a COVID-19 vaccine and raised hopes for a sudden end to the pandemic.

 

In reality, the wide distribution of the Pfizer vaccine is months away, and would be available to only a small percentage of the population before then, with two or three applications and strict protocols (like storage at about -70 degrees Celsius, which many facilities are not prepared to provide).

Since then, gold has risen or fallen – sometimes in short, rapid and sharp moves – based on vaccine news from various companies. In the meantime, COVID-19 cases, hospitalizations and deaths are all on the rise, causing new statewide shutdowns. If investors would take a longer view, we have already over-spent over $3 trillion in 2020 and will continue to run up trillion-dollar annual deficits in the foreseeable future.  No matter how rapidly various vaccines are developed, when an effective vaccine is finally available allowing us all go back to work safely, the long-delayed inflation from this new money will finally begin to rise. At that point, gold and silver will rise compared to the shrinking value of these diluted paper dollars!

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