Pfizer and BioNTech report that their vaccine candidate has proven to be over 90% effective in Phase 3 testing
Crude oil prices have soared as the breakthrough could help restore some optimism in the energy industry
Gold and silver prices plummeted due to improving risk sentiment
Pfizer (NYSE: PFE) and BioNTech (NASDAQ: BNTX) today announced that their coronavirus vaccine candidate has proven to be over 90% effective. This is a significant step in the fight against the deadly virus that has killed more than one million people worldwide.
“A great day for science and mankind”
Pfizer and its German partner BioNTech are the first pharmaceutical companies to publish successful results of widely used vaccine tests. The drug companies said that there are no major safety issues related to the vaccine and expect to receive regulatory approval for emergency use by the end of November.
The positive results from Pfizer and BioNTech are good news for all coronavirus vaccines currently being developed and are proof that the virus can be cured with a vaccination.
“Today is a great day for science and mankind,” said Albert Bourla, Chairman and CEO of Pfizer.
“We are reaching this critical milestone in our vaccine development program at a time when the world needs it most as infection rates reach record highs, hospitals fail due to overcapacity and economies struggle to reopen.
Higher oil prices cry out for improved energy demand outlook
Shortly after Pfizer’s announcement, oil prices soared as the breakthrough could help restore some optimism in the energy sector. Pfizer’s announcement is of the utmost importance to the oil industry, which was brought to its knees in the spring, causing the US crude oil price to go negative for the first time in history.
Crude oil prices rose by about 11% to $41.29 per barrel following Pfizer’s announcement that the vaccine is much more effective than health experts had expected. Oil prices made progress today, marking the best day since May.
After the outbreak, the energy industry was hit by the virus, as demand for kerosene and gasoline fell sharply.
Oil is one of the critical factors for global economic growth and investors were concerned that the reintroduction of freezing measures across Europe due to the resurgence of coronavirus outbreaks would further slow global economic growth.
“Oil is rallying like mad, connecting the dots between a possible vaccine and a resurgence in global demand growth,” said Matt Smith, head of commodities research at ClipperData.
Crude oil traders are now hoping for a more sustained recovery as a move above $43 should pave the way for a push towards the $50 mark.
Gold price slides as risk sentiment improves
On the other hand, spot prices for gold plunged by almost 5% after the announcement of the vaccine and dwarfed its appeal as a safe haven. Previously, thanks to a weak USD and in hopes of an additional boost following Joe Biden’s triumph in the US presidential election, spot prices reached their highest level in almost two months at $1,965.33 per troy ounce.
“Some believe this will be a driving force for economic growth as we come out of the pandemic situation, so it’s positive news for the world, but negative news for gold,” said independent analyst Ross Norman.
Vaccine news was also up, putting Wall Street on track for record highs. But a weakening dollar index, hovering around its 10-week low, helped keep the gold price above the critical level of $1,900.
However, today’s news pushed gold down to test the critical support line near the $1,860 mark. A breach below these levels will open the door to the $1,840 level, where gold buyers are likely to wait and see.
Silver prices join gold on a downward journey as Citi lowers the price target
Silver buyers are even having an arduous day as the precious metal is trading at more than 7% in the red. Buyers are now struggling to close above the $24 mark and are therefore avoiding closing below the 200 DMA mark, which is likely to lead to selling pressure. The next support lower is $22.80.