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COVID vaccine news led to gold profit booking: Metals Focus

Updated : November 20, 2020 03:46 PM IST

The recent news of Moderna and Pfizer successfully completing Phase 3 trials of their respective vaccines for COVID-19 has led to a drop in gold prices, resulting in profit booking, said Chirag Sheth of Metals Focus.

“2020 was a fantastic year for gold and silver investors. So when you have this kind of news coming in, there would be some sort of profit booking coming to picture and that is something which we are already seeing,” he said in an interview to CNBC-TV18.

“We will have to see how the ETF data pans out at the end of the month, but we are surely seeing some sort of profit booking by investors who probably bought at lower levels,” he added.

However, Sheth believes that gold still has some legs on the upside. “Probably 1-1.5 year of another bull run is likely,” he said.

On paper gold, he said, “I believe that at least 40-50 percent of people who bought these products where those who wanted to buy physical gold but could not do so because of COVID related restrictions. So, once things improve, you will see these people returning back to tradition physical gold.”

Sheth is expecting gold prices to be at USD 2,300 and silver prices to be at USD 32 for the next year. “We would look at any dips which is there in both these precious metals to add on to our position,” he added.

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