Oil Jumps, Gold Plummets On Vaccine Breakthrough

By Glenn Dyer | More Articles by Glenn Dyer

Gold fell by the most in seven years and oil surged by more than 10% at one stage in the wake of the news of the Pfizer COVID-19 vaccine.

Iron ore also rose, silver fell but copper was easier.

The vaccine news and a more upbeat outlook in the wake of the confirmation of the win by President-elect Biden saw investors chase riskier investments – a move that will spill over into the ASX today and the gold and energy sectors of the market.

In fact volumes in the oil market surged to the point where they had exceeded Fridays in the first few hours of dealings.

Brent crude was up $US3.11, or 7.9%, at $US42.44 a barrel just after 7 am Sydney time while US West Texas Intermediate crude rose $US3.09, or 8%, to $US40.23 a barrel.

Both contracts rose more than $US4 earlier in the session and traded more than 120% of Friday’s volumes.

Pfizer said its experimental vaccine was more than 90% effective in preventing COVID-19, based on initial data from a large study.

Investors took that as a sign that the lockdowns around the world that had led to a drop-off in demand for oil and products such as jet fuel, would now be a thing of the past.

But a very different story for gold and one that will carve up the share prices of listed gold mining companies in Australia today.

Watch the prices of Newcrest, Evolution, North Star, Saracen, St Barbara, and others, while the price of shares in Woodside, Santos, origin, Oil Search, and even BHP should strengthen off the news of the surge in global oil prices.

Gold slumped more than 5% on Monday on the news of the first successful late-stage COVID-19 vaccine trials as investors dumped safe-haven bullion and went full risk on

(Surprisingly though, the Aussie dollar only rose a matter of a few basis points in the session to around 72.70 US cents in early Asian dealings – it had ended around 72.50 last Friday).

Comex gold futures slid in New York slumped 4.9% (or close to $US100 an ounce) to $US1,855.30 an ounce. Comex silver slide 6.7% to $US23.87 per ounce, while Comex copper dipped slightly to $US3.15 a pound, still high.

In Asia, iron ore prices jumped more than 3% before the Pfizer news broke.

The price of 62% Fe iron ore fines delivered to northern China rose $US3.95 to $US121.75 a tonne.

Glenn Dyer

About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

View more articles by Glenn Dyer →