With Biden’s feet now firmly under the White House Resolute desk, he will be tasked with improving what is a weak dollar, especially in terms of GBP to USD. Aside from currency strengthening, traders will be wondering what the future will look like in terms of what the outlook will be for precious metal prices.

Following on from what was a particularly impressive year for precious metals, could we be set to witness further impressive gains – or should investors be more cautious about the prospects, as world economies slowly begin to recover from the coronavirus?

What happened in 2020?

Last year will go down as one of the most memorable in modern history, with millions of deaths from the novel coronavirus, the near closing of the world’s largest economies, and some of the strictest lockdown measures ever imposed on western society.

However, it was not all doom and gloom for investors, particularly those trading on precious metals, with gold prices hitting all-time highs in 2020.

Indeed, the price of the yellow metal experienced a significant rise in value last year, trading at more than $2,000 per ounce, reflecting its status as a safe haven metal.

Meanwhile, the demand for silver has been on a consistent increase since the start of the coronavirus pandemic back in March 2020, while supply disruptions supported the price of silver.

In general, precious metals strengthened in 2020, amid many months of uncertainty and through robust demand from investors.

The Biden Effect on Gold

With Joe Biden now installed as president, the expectations are that gold prices will be higher in the longer term, as the Democrats look set to offer greater stimulus and preside over large budget and trade deficits.

As a result of this, prices for the yellow metal should demonstrate a positive trend during Biden’s presidency, as increased stimulus and deficits are likely to accelerate the reasons for investors turning to gold as an asset.

With President Biden placing green spending plans high up on his agenda, and the risk of inflation being a very real possibility, gold prices could rally as price rises build up momentum.

This is because gold is a common inflation hedge metal in the long term, typically increasing in value as the dollar loses its purchasing power.

The Biden Effect on Silver

Market analysts say silver’s dual role as a safe-haven asset and an industrial metal, along with its greater volatility, could mean that is fares even better than gold, as usage could increase significantly on the back of President Biden’s ambitious clean energy plans.

In an increasingly unpredictable and uncertain world, it is difficult to consider the impact a Biden Presidency will have on silver prices.

However, what is guaranteed is that climate change, renewable energy and clean air plans will feature much more prominently in the US policy and decision making, compared to the Trump Administration – to the benefit of silver.

With silver being a core element in the manufacturing of solar panels, prices of metal could be set to rise sharply, if President Biden follows through on his promise to install 500 million solar panels in the next five years.
Goldman Sachs predicts that solar installation will increase by 50 per cent between 2019 to 2023. This is very likely to lead to a great surge in demand for silver, due to it being one of the key components in the production of the panels.

And after pledging early on in his election campaign to re-join the Paris Climate Agreement on “day one” of taking office, President Biden has signalled his intent on the matter, and investors will be watching closely during the early days of his administration.

Disclaimer:

This information is not considered as investment advice or an investment recommendation, but instead a marketing communication. IronFX is not responsible for any data or information provided by third parties referenced, or hyperlinked, in this communication.

The post Precious Metal Prices Under President Biden appeared first on Complete Turnkey Introducing Brokers (IB) Solution at IronFX.

Let’s take a look at some of these companies to understand how their coronavirus programs are potentially appealing and can deliver potential returns for shareholders.

Pfizer, Moderna, Novavax

In general, stocks have had a good month in November with the Dow Jones Industrial Average and Nasdaq Composite rising 11.8%, and the S&P 500 10.8%. Positive news about a coronavirus vaccine as well as the US elections results with president-elect Joe Biden have helped boost market sentiment. Coronavirus vaccine stocks had even a better month, with December proving to be a great month for coronavirus vaccine stocks. A couple of them have already requested Emergency Use Authorisations (EUA) and others are advancing in phase 3 trials. GlaxoSmithKline (NYSE:GSK), Novavax (NASDAQ:NVAX), and Johnson & Johnson (NYSE:JNJ) aren’t ready yet to sell their vaccines, but they’ll probably report soon on their clinical trial data, and if they get regulatory approval, their stocks will be on the rise.

Pfizer

In December, Pfizer’s stock rose after regulators in the UK authorised the company’s BioNTech-partnered coronavirus vaccine. The coronavirus vaccine is 95% effective against Covid-19 as well as people who have already been exposed to the virus. Pfizer and BioNTech said that they can make up to 50 million doses in 2020 and 1.3 billion doses in 2021. The UK has received 40 million doses already.

In November, Pfizer announced that it had completed the transaction to combine its Upjohn Business with Mylan N.V. to form Viatris Inc.

Being one of the biggest pharmaceutical companies in the world, Pfizer is considered a reliable company with great prospects. However, its recent sales declined, and adjusted earnings are expected to be flat, marking five quarters in decline. Perhaps investors who look for companies with stocks that can provide accelerating earnings and sales growth, might turn away from Pfizer, but its future due to the vaccine might prove to change things.

Moderna

Moderna is a clinical-stage biotechnology company which is currently carrying out phase 3 trials of its Covid-19 vaccine. If the vaccine is effective at least 70%, the company will seek emergency approval from the FDA. The Moderna stock has gone up 253% this year. All of the gains since Moderna’s initial public offering in late 2018 were generated in 2020. If someone invested in 2018, they would need to have invested over $120,000 to grow to $1 million today.

For Moderna’s stocks to continue to rise, the company’s COVID-19 vaccine mRNA-1273 would need to be successful. The company has already filed for emergency use authorization (EUA) for mRNA-1273 on 30th of November and on 17th December an FDA advisory committee will review its application. If mRNA-1273 gets regulatory approval, Moderna will receive billions of dollars as the biotech has supply deals with the EU, US, UK, Canada, Japan, Qatar, Israel, and Switzerland.

Moderna’s market cap is close to $60 billion which shows the revenue potential for mRNA-1273. Moderna CEO Stephane Bancel has said that the company plans to invest profits from mRNA-1273 into increasing its production, with up to 50 mRNA candidates into clinical testing, including an mRNA seasonal flu vaccine.

Novavax

Novavax is a vaccine development company which has begun late-stage trials of its Covid vaccine in the UK and is expected to start its large-scale phase 3 trials in the US and Mexico in December. The company doesn’t have any other products on the market but its NanoFlu vaccine could be ready for FDA approval. The Federal government has supported the company with $1.6 billion funding budget. The stock rose 2,000% year-to-date. If its vaccine is approved, the stock could potentialy rose even more next year.

But its strength is not only limited to its coronavirus vaccine, as Novavax’s NanoFlu vaccine to treat influenza in older adults, could be approved and be available in the market soon enough. If the market continues to be as cheerful about Novavax’s prospects, then 2021 would be an even greater year for the vaccine development company.

Disclaimer:

This information is not considered as investment advice or an investment recommendation, but instead a marketing communication. IronFX is not responsible for any data or information provided by third parties referenced, or hyperlinked, in this communication.

The post Coronavirus Vaccine Stocks: What to Watch appeared first on Complete Turnkey Introducing Brokers (IB) Solution at IronFX.

First of all we must start by noting that various important officials from the World Health Organization (WHO) have directly congratulated China and its health workers, for the splendid job they have done to control the virus outspread. This is solid evidence that WHO has taken in mind the global circumstances of the virus, has noted other countries response to the matter and has made comparisons which confirmed that China’s response is very accurate. Also countries like the US, India, Brazil and the UK, have populations that are significantly lower than China’s, yet have registered millions of infected cases. China on the other hand, has managed to keep the number nearby 100K which implies that the measures that were taken, had been strategic and can be studied or even copied by others.

Looking into China’s past can help us identify how the nation was able to quickly adapt to the circumstances of the virus. Back in 2003 a severe acute respiratory syndrome (SARS) respiratory disease was identified in China and spread to 4 other countries according to WHO. Even though the virus did not cause a global pandemic at the time, it forced the Chinese to create awareness over such diseases and the possible health impact on the society. Once the first covid-19 cases were identified back in December 2019 in Wuhan, the Chinese were able to identify its symptoms and took notice of the fast virus spread. On the last days of 2019, the Chinese had officially announced the detection and named the novel coronavirus as an official public health threat. After the official announcement of the virus, a number of immediate measures was announced in the following days. Wuhan was placed under lockdown and travel restrictions were imposed as a first attempt to isolate the virus.

Inside Wuhan, citizens could not use public transportation as it was set out of service. The measures were soon imposed on other cities of the Hubei province of which Wuhan belongs to. Furthermore, schools were suspended and children were left at home with their families. Also, aggressive measures like only allowing one member of each family to leave the house for necessary purposes like shopping or services reasons were implemented. The idea to reduce citizen movement to minimal levels was very much the game plan of the Chinese authorities and was very well understood by the people. These were not measures imposed as a way to spread fear in people and force them to stay home, as some European citizens have viewed them. These were measures to reduce the spread of the virus and protect the people. There is a very different viewpoint in the pre mentioned statements. In general, following up on these measures could be very challenging, especially for the citizens of Wuhan that were placed in a lockdown for 76 days in a row.

Yet, people followed authorities’ orders working towards a common goal and succeeded. In the meantime China acted in great speed to setup rapid testing points. Rapid tests in Wuhan specifically brought out all the virus carriers and placed thousands on quarantine, with special cases being transferred to the hospital. In a matter of one month, approximately 9 million people were tested, possibly dragging out of the dark thousands of asymptomatic cases that could have potentially spread the virus even further, without the knowledge of testing positive. The extensive testing is something that the Chinese acted upon with lighting speed and is considered as the biggest contributor of saving lives and people from covid-19. Further support to keeping a lid on the virus outbreak, was how the Chinese turned stadiums and other large buildings into hospitals. At these buildings, patients were able to isolate themselves protecting their families from being exposed to the virus by their presence.

Once rapid testing was in place and people with even the slightest of symptoms could find out if positive or not, the Chinese made another important announcement. They announced the wide adoption of mask wearing in public. As China has a huge manufacturing sector, it managed to produce large amounts of masks as they became mandatory for all people at all times outside their home. Even as months past and the virus started making its way in other continents the adoption of masks was not strictly imposed by many countries. Especially in the US, mask usage was not recommended which may have led to a mass spreading of the virus. In general, there was a lack of clarity over the use of masks and as time progressed, more governments realized that masks were in fact important yet cases had already surged dramatically in the US, Europe and even wider Asia.

In addition, other important mistakes in various countries involved allowing large crowds of people coming together for entertainment purposes. According to an article by the Lancet Public Health, 150,000 people attended a horse racing event in the UK, just days before the country announced a full lockdown in March. Also in the US and specifically South Dakota, over 400,000 people attended a motorcycle event during the summer months. These happenings were crucial mistakes that may have boosted the number of new cases by thousands. Even as these countries had taken notice of the virus spread, they seemed naive in their actions and allowed for the absurd to happen.

As a closure, we must note that the Chinese displayed a very different approach to dealing with the virus. In our opinion, the biggest difference had been their attitude towards the matter. First they had shown readiness to deal with such a problem which is rather remarkable. We say remarkable because they had dealt with it somewhat terribly in the past and managed to do a lot better in the present. Most countries around the world had already seen the signs that the virus was spreading but did not prepare for it accordingly. Also, some governments and individuals around the world did not take the virus seriously and falsely believed that this was a conspiracy theory to control humanity. Some important figures around the world have tested positive since then, eventually making a lot of other people believe the situation of the virus is very dangerous and their response is critical. Yet, we would like to stand to two striking characteristics that the Chinese have shown, that in our opinion separate them from many other populations.

First the willingness to stay disciplined to the rules and measures imposed from the government. The action shows a high degree of belief in authorities thus promotes unity and stability. This discipline was not displayed in European countries (Italy and Spain) and they had to feel the negative impact on public health and eventually the economy. Second, was their willingness to suffer for the greater good of the society. People were deprived of their personal freedom, yet followed the orders, and protected one another. They displayed patience and understanding as they saw their freedom but also their jobs being threatened for over two months. As a result, the Chinese have managed to drive the spread at very low levels for months and are currently the only economy to close 2020 in growth. They managed this due to their adaptability to circumstances. Other countries will see their economies stabilizing or even improving as we move into the next year but controlling the virus could remain a challenging task. Can we learn from the Chinese response? Do we need to study there reaction and use their methods to our advantage?

If you have any general queries or comments relating to this article please send an email directly to our Research team at research_team@ironfx.com

Disclaimer:

This information is not considered as investment advice or an investment recommendation, but instead a marketing communication. IronFX is not responsible for any data or information provided by third parties referenced, or hyperlinked, in this communication.

The post How was China able to contain the covid-19? appeared first on Complete Turnkey Introducing Brokers (IB) Solution at IronFX.