Now the market is dominated by concerns about the logistics of actually distributing the vaccine, which may reduce enthusiasm for risk assets.

The past few weeks have not been the best for precious metals enthusiasts as volatility dominated the markets.

So far, gold futures have given up last week’s gains and are down 4.50 percent. Last week, gold tried to recover, adding 3.82 percent, helped mainly by the fall of the US dollar, which fell 1.92 percent against a pack of its main rivals. So far this week, the dollar has rebounded from last week’s losses, with the US dollar index up 0.78 percent. Silver futures also lost ground this week, falling 5.03 percent and giving up some of last week’s gains of 8.53 percent.

The sudden weakness in precious metals can be explained by the optimism that swept the market after Pfizer announced a coronavirus vaccine, fueling risk appetite and boosting the performance of risky assets such as stocks. Right now, several countries are negotiating with Pfizer to secure doses of the vaccine, which is more than 90% effective, according to the company’s initial data.

Precious metals have rallied since the start of the pandemic as a rise in risk aversion in markets pushes traders and investors to safe-haven assets. Many also fear high inflation as international central banks consider negative interest rates and have balance sheets that are reaching record highs.

Those fears are now being fueled by governments’ decision to provide fiscal stimulus to keep the economy afloat, given the pernicious effects of the restrictions enacted to stop the spread of the coronavirus. Because of this, governments are currently accumulating record amounts of debt, which could have negative effects in the long run, at least according to the conventional wisdom.

In any case, the recent victory of the Democratic candidate Joe Biden has strengthened hopes for another stimulus in the United States, which is necessary at the moment and would have a positive effect in the short and medium term. Moreover, the fact that the pandemic continues to grow around the world signals that stimulus efforts will not stop anytime soon.

As COVID-19 continues to spread, it has already infected approximately 52,564,762 individuals and killed 1,291,785. The most affected country is the United States with a total of 10,708,728 cases and 247,398 deaths, followed by India, Brazil, and France. Many countries are considering another general lockdown, while others (such as the UK and Israel) have already implemented it. Sweden, once praised for its unique approach, is now also considering further restrictions in light of a recent surge in cases.

Now the market is dominated by concerns about the logistics of actually distributing the vaccine, which may reduce enthusiasm for risk assets. This is already affecting stock market performance and could favor precious metals in the near term.