Gold prices inch higher as vaccine euphoria wears off
Gold gained towards the end of the week after the initial buzz from the news that the BioNTech-Pfizer vaccine proved more than 90% effective in Phase III tests begun to wear off, with doubts over the efficacy and distribution. Markets soared back on Monday in response to the US election result, but coupled with the fading optimism about a cure-all vaccine, the precious metal has inched higher as investors turn back towards their trusted safe haven assets.
After a 1.65% fall over the past month, pot gold rose 0.8% to $1890.90 per ounce on Friday afternoon (14:36 GMT) and US gold futures were up 1% to $1892.20.
A joint survey by Central Banking and Invesco released this week has revealed that 23% of world central banks see gold as a “more attractive asset” following the Covid-19 pandemic, while the remaining 77% responded their view on gold “had not changed”.
Even though opinions have not markedly changed, central bankers “generally expect their gold holdings to increase over the next year”, and general public investor demand for gold has been “robust” throughout the pandemic as the investing public still sees the metal as a safe-haven asset during market turbulence.
Commenting on gold’s gains on Friday, Kitco Metals senior analyst Jim Wyckoff told Reuters:
“We have got Covid-19 raging in the U.S. and the uncertainty surrounding that the potential for some more economic damage in the coming months; all that is working in favour of gold market bulls”.
He added: “Everybody was excited about the vaccine, but then the grim realisation sets in that it will probably not be available for general public consumption until late winter or spring and until then… we’ve got to get through some very rough waters”.
Eli Tesfaye, senior market strategist at RJO Futures, also weighed in:
“There is fear of a second wave with lockdowns and restrictions and the market has to work through (some) stimulus whether we’re in a lame duck situation or with a new President elect. So, the market at some point has to anticipate that cash and price in the potential inflation”.
Gold also received a boost from a weaker US dollar index on Friday, as well as dwindling crude oil prices trading at $40.50 a barrel.
Christopher Lewis, writing a price forecast for FXEmpire today, argued that gold looks set for an upward trajectory in the near future:
“You can make an argument for gold going higher regardless of what happens next, just due to the central banks, but when you start talking about currency destruction and economic slowdowns, gold is a bit of a ‘safety trade’.
“If the coronavirus situation continues to cause major issues, then we are looking at a scenario where people may be looking to pick up gold in order to protect wealth in a slowing economic situation as well”.
Gold as currency fintech Glint Pay secures additional £2.5m in funding
Gold as currency fintech firm, Glint Pay, has continued its expansion since its Crowdcube campaign in 2018. Today, it announced that it had secured an additional £2.5 million in funding to support its growth, to 138,000 active users in the next twelve months.
The funding news follows the launch of Glint Pay’s peer-to-peer transfer facility – called ‘Glint It!’ – which allows users to send and receive money, including spendable gold and other forms of currency. The company identifies itself as one of the first to use gold as ‘an everyday global currency’, with its app allowing customers to ‘buy, sell, spend and share’ their physical gold.
Speaking on the recent fundraiser, the company said that £1.25 million was made up of private investment, with the remaining £1.25 million being contributed by the UK government’s Future Fund. Glint said that the fund matches the capital raised through private investment, and that it ”was launched to support innovative companies during the Covid-19 pandemic”.
Since its launch in 2016, this latest round of investment sees the company’s funding amount to a total of £24 million. The company said that the recent funds will be leveraged to support the growth of its fintech app, and will contribute to key personnel hires, marketing investment and expanding the Glint userbase.
Commenting on the news and the company’s ambitions, Founder and CEO, Jason Cozens, said: “This latest funding is another significant step towards fulfilling our growth plans. We set out to transform the industry and the amount of funding we’ve secured since launch proves that there’s real appetite amongst investors and consumers for an innovative alternative to spend, save and store their finances.”
“After last year’s expansion into the US and the launch of our P2P offering, Glint It!, we’re eager to tackle the next stage of our growth and meet our ambitious targets over the next 12 months. Additional funding will help to facilitate this, but it is our diverse and exceptional leadership team that provides us with a clear, competitive edge.”
Mr Cozens added that the Future Fund has been “hugely effective” for many businesses in the current climate, and will help the government’s ambition to support the UK’s most innovative companies. He finished by saying that: “This fundraising will accelerate our international expansion as well as attract additional future investment sources, from both within the UK and externally.”
With the demand for online banking and fintech solutions allegedly rising by 50% during the pandemic, it will be interesting to see whether Glint will continue to capitalise on what is essentially an unsteady market. Also worth considering is that gold has rallied once again on Friday, but should a COVID vaccine be rolled out successfully, will safe havens like the dollar and gold lose some of their appeal – and would this affect Glint’s success?
Synairgen shares bounce 30% as SNG001 shown to accelerate COVID-19 recovery
Respiratory drug developers, Synairgen (AIM:SNG), saw their shares rally by almost a third on Friday, as the company reports that its SG016 trial demonstrated the efficacy of its SNG001 treatment in treating patients with COVID-19.
The company posted its recent trial data in The Lancet Respiratory Medicine journal, which illustrated ‘positive topline results’ from a randomised study of 101 hospitalised COVID-19 patients to either SNG001, Synairgen’s inhaled formulation of interferon beta-1a, or placebo.
Positive data has been reported over time, in July, September, and now in November, in greater detail. The trial was double-blind, randomised, placebo-controlled, and sought to test the efficacy and safety of inhaled SNG001 as a therapy for patients hospitalised with COVID-19. Patients received the SNG001 or placebo by inhalation via a mouthpiece once daily for 14 days, with the primary endpoint being the change in clinical condition, using the WHO Ordinal Scale for Clinical Improvement.
Synairgen said that, based on the trial, “SNG001 was shown to be well tolerated and patients who received the drug had greater odds of improvement and recovered more rapidly”. Across the scale of clinical improvement, patients receiving the SNG001 were seen to have greater odds of improvement, and were also more likely to recover to “no limitation of activity” during treatment. Most notably: in the placebo control group, there were three deaths. In the SNG001 sample, there were none.
Speaking on the trial data, company Professor Tom Wilkinson, Professor of Respiratory Medicine at the University of Southampton and Lead Author, said:
“The results confirm our belief that interferon beta, a widely known drug approved for use in its injectable form for other indications, may have the potential as an inhaled drug to restore the lung’s immune response and accelerate recovery from COVID-19. This pH neutral, inhaled interferon beta-1a formulation (SNG001) provides high, local concentrations of the immune protein which boosts lung defences rather than targeting specific viral mechanisms. This might carry additional advantages of treating COVID-19 when it occurs alongside infection by another respiratory virus such as influenza or Respiratory Syncytial Virus that may well be encountered in the winter months.”
Following the announcement, Synairgen shares rallied by between 30% and 35%, up to more than 131p apiece at lunchtime on Friday 13/11/20. Until July, the company’s stock was trading for around half this price, but once the first SNG001 data was published, shares traded for as much as 246p.Nakama shares fall 20% as it states ‘working capital situation may deteriorate’
Recruitment consultancy firm Nakama (AIM:NAK) saw its shares dip by as much as 28% at one point on Friday, as the company laid bare the bleak outlook for its trading and cash flow.
The company, which operates across web, interactive, digital media, IT and business change sectors, fleshed out its earlier COVID-related announcement back in September, which discussed the ‘immediate and significant impact’ the pandemic had had on its trading activities.
On Friday, Nakama said it had relied on a number of government initiatives – such as the Job Retention Scheme in the UK – as well as state support in Hong Kong and Singapore. The aim of taking part in these schemes, it said, was to preserve cash and ‘retain the business ability to continue to trade’.
Its statement on Friday said that trading had been in line with management’s expectations, which had been adjusted once the practicalities of the pandemic came into full effect. However, it maintains that market conditions remain unfavourable, ‘particularly in light of a second wave’, which has prompted new national lockdowns and continued uncertainty.
Speaking on the deflated situation the company finds itself in, the Nakama statement read:
“It remains the Board’s view that as the various government support schemes are ended, the Company will face a number of trading and cashflow challenges and without access to additional capital the Group’s working capital situation may deteriorate. The Company’s largest shareholder has made it clear to the Board that they would not support a fundraise and would vote against the necessary shareholder resolutions to issue new shares.”
“As such and noting that the UK government support schemes are due to end in Q1 2021, the Board is now exploring a number of options for the Company and its businesses and further announcements will be made as and when appropriate.”
Following the announcement, the company’s shares were down by between 20% and 28% on Friday, down by around 22% at lunchtime – at 0.54p a share 13/11/20. This is still above its year-to-date nadir of 0.23p in March, but represents a climb-down from a recent uptick, with the company’s stock moving between 0.75p and 0.80p during October.Galliford Try reveals “excellent” start to financial year
Galliford Try (LON: GFRD) revealed an “excellent” start to the financial year and expects to return to profitability in the first half.
Amid the first lockdown, the construction group faced major disruption as sites shut and projects were delayed to adhere to social distancing measures.
Productivity now continues at normal levels and since July, all operations are continuing since normal despite the second lockdown.
The company said: “Our strategy and sector focus mean that the group is positioned to emerge strongly from the pandemic, supporting the government’s planned investment in infrastructure and economic recovery.”
Galliford Try has revealed plans to continue paying a dividend at the half-year stage.
Shares in the group spiked this morning and were up over 17%. Galliford Try shares (LON: GFRD) are currently trading 14.18% higher at 93,82 (0927GMT).
Castings Plc swings to loss but will pay dividend
Castings shares (LON: CGS) fell on Friday as the group swung to an interim loss.
In the group’s half-year report, the metals fabricator reported a loss before tax of £0.63m – compared to the £7.34m profit a year earlier.
The company said in a statement that demand had been “significantly impacted” amid the pandemic.
Output fell by approximately 80% during the first two months of the period as the commercial vehicle sector, which represents 70% of group revenue, closed production facilities.
In the six months to September 30, sales plunged by 43% to £41m.
There continues to be uncertainty, however, the current heavy-truck schedules are suggesting that trading is returning to pre-pandemic levels.
“The group has been successful in obtaining a number of new projects with our European truck customers that will commence production in 2021/22 and 2022/23. In addition to replacement work, these projects include additional platform volumes and also more value-add product solutions,” said the group in a statement.
“The group maintains a strong balance sheet with cash levels of £35.2 million; an increase of £1.8 million during the period after the dividend payment of £5.0 million.”
Despite the disruption, the group is said it will pay a dividend. An interim dividend of 3.57 pence per share has been declared and will be paid on 7 January 2021 to shareholders. Castings shares (LON: CGS) are currently trading -2.66% at 324,14 (0857GMT). In the year-to-date, shares in the group have fallen from highs of 443,76.European stocks sink as vaccine optimism fades
European stocks continue to fall on Friday as excitement over the Covid-19 vaccine falls.
Shares started to wane yesterday and on Friday’s opening bell, started to fall further into the red as Coronavirus cases across the UK rise.
“With the worst of the cold weather yet to arrive and the pace of new infections only expected to increase as we head towards year end, it is slowly becoming apparent that the arrival of a vaccine can’t come soon enough,” said Michael Hewson, chief market analyst at CMC Markets UK.
“It is also quite apparent that even if one was to arrive in the near future it wouldn’t be able to change the situation on the ground as it is now, which means things are only likely to get worse before they get better.”
On Thursday, the UK reported a new daily record of cases. The number of people infected hit 33,470.
On opening, the FTSE 100 was down 0.7%, the Cac 40 is down 0.2%, the Ibex fell by 0.5%, and the Dax was down by 0.1%.
The biggest fallers on Friday morning were Rolls Royce, stocks were down 2.11%, and Royal Dutch Shell, where shares fell 1.94%.
Asian stocks were also lower on Friday. Japan’s Nikkei fell 0.6% and the Hang Seng index fell by 0.5%.
Commenting on the Asian markets, Jeffrey Halley, senior market analyst, Asia Pacific, OANDA said:
”The danger when financial markets price in two years of return to normal in the space of two hours, is that there are no stragglers in the herd left to continue the momentum. That appears to be the case after the Pfizer BioNTech announcement earlier this week. It only took a day or so for some to move back to the comfort of big tech, and the lack of macroeconomic drivers since, has sapped momentum.
“A plethora of central bankers since has stated that the road ahead remains cloudy and that a vaccine won’t be an instant panacea for the world’s economic ills. Even positive noises from the US’ Dr Anthony Fauci about the Moderna vaccine, initial results of which are due soon, failed to reinvigorate the rally.
“That probably tells us that the street went all in, and then went what now, as they found themselves marooned in the portable frozen Antarctic wastes required to distribute the Pfizer vaccine. Covid-19 continues to spin out of control across the US, Europe and other parts of the globe, with the ensuing movement restrictions sure to crimp Q4 growth. Any lingering hopes of a US fiscal boost receded further overnight, as US Initial Jobless Claims fell more than expected, although they remain above 700,000,” he added.
Unemployment: London job market lags
New figures suggest that the London job market is falling behind the rest of the country.
The Recruitment & Employment Confederation (REC) revealed on Friday that whilst job advertisements were rising in the north-west England and Wales, London was seeing a fall.
Between March and October, job adverts in the north-west jumped 36.8% whilst in Wales they surged 33.4%. Meanwhile in London, the number fell by 18.7% over the period.
Matthew Mee, director of workforce intelligence at Emsi, commented on the new findings: “One of the most interesting developments we are seeing in terms of employer demand is the ‘London lag’, which is seeing the capital return to pre-lockdown levels at a much slower rate than other regions of the country.
“When we couple this with the fact that furlough take-up has been higher in London than elsewhere, and that the highest rise in claimant counts has been in the London commuter belt, it seems that the restrictions since March may well have had a greater proportionate impact on the capital than on other regions of the country,” he added.
From the numbers, it was found that the number of job adverts for nurses amid the pandemic shot up. Since March, the number of active job postings for nurses grew by 39%.
Within the hospitality sector, postings for bar staff plunged -48.7% whilst adverts for chefs fell by -45.6%.
In the three months to September, unemployment rose to 4.8%. REC boss Neil Carberry said: “Unemployment and redundancy numbers earlier this week showed that this is a tough moment for our jobs market.”
“But we also know that there are always jobs being created by those businesses who can, and as this data reveals, there is hope to be found in many places and sectors.”
Global equities ran out of steam as vaccine and Biden jubilation fade
Having fallen during the week before last, global equities have since been spurred by the Joe Biden victory and Pfizer vaccine hopes. On Thursday, however, some of the good-feeling steam wore off, as investors greedily priced in potential upsides in the short-term.
Choosing to be overly optimistic in the moment, markets are now watching equities look for something to be excited about. As stated by IG Chief Market Analyst, Chris Beauchamp:
“Equities have moved lower this morning, as the vaccine bounce begins to fade across markets. After days of gains the rally in equities is beginning to slow down, as indices throughout Europe move into the red.”
“As enthusiasm about a vaccine begins to fade the FTSE 100 has lost ground, with a slowdown in the excited buying of hard-hit value names in sectors like travel, airlines, banks and others.”
Having soared on Monday, Rolls Royce has spent a few days shedding points, down by an additional 8% on Thursday. Similarly, having enjoyed an escape from a difficult year so far this week, oil blue chips such as BP and Shell followed the path of airlines, and watched their shares fall. Another issue has been a lack of positive developments – which is giving markets mixed messages. Mr Beauchamp added: “Political developments, or lack thereof, continue to have little impact, with the lack of any White House pronouncements helping to calm market nerves about the US political outlook.” Spreadex Financial Analyst, Connor Campbell, added on Brexit: “The mid-November deal deadline is almost upon us, with no agreement in site, and Boris Johnson’s government internally in chaos after the departure of director of communications, and Dominic Cummings ally, Lee Cain.” With global equities lacking a reason to celebrate, Eurozone indexes slipped, with the DAX down 1.2% and the CAC falling 1.5%. Slightly ahead of its European counterparts, the FTSE fell by 0.7%, lifted slightly by a sharp drop-off in Sterling. Notably, the Dow Jones was down by over 1.3%, and the Nasdaq fell by 0.8%. Even with vaccine jubilation fading – which should favour 2020’s growth stocks – big tech couldn’t muster up enough strength to lift US markets.Living for the long term…Mainstream Impact Investment and Emerging Market Strategies are breaking the mould
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