Gold Falls On Hopes For Vaccine, Smooth Biden Transition
Gold hit a fourmonth low on Tuesday as investors deserted the safehaven metal following a U.S. federal agency's transition approval for Joe Biden and growing prospects for the swift release of an inexpensive COVID19 vaccine.
- Last Updated: November 24, 2020, 13:18 IST
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Gold hit a four-month low on Tuesday as investors deserted the safe-haven metal following a U.S. federal agency’s transition approval for Joe Biden and growing prospects for the swift release of an inexpensive COVID-19 vaccine.
Spot gold fell 0.2% to $1,831.90 per ounce by 717 GMT, having earlier slid to its lowest since July 21 at $1,820.45. It slumped as much as 2.2% on Monday.
U.S. gold futures were down 0.6% to $1,826.30.
“Investors are clearly rallying around the narrative of a vaccine-fuelled economic reopening, to the point they’re willing to look past the economic realities and potential downside risks that may lie ahead,” said FXTM market analyst Han Tan.
European stock futures rose, extending optimism in Asian equities spurred by news AstraZeneca’s COVID-19 vaccine could be up to 90% effective.
In another boost to risk sentiment, U.S. president-elect Biden received the transition go-ahead on Monday. On Twitter, President Donald Trump said he was recommending that his team “do what needs to be done with regard to initial protocols”.
“The fact that we have a smoother transition between President-elect Biden and Trump is just another reason to think that the recovery as it is currently playing out has one less risk to it,” said IG Markets analyst Kyle Rodda.
The breakdown of support around $1,840 suggests further downside into the $1,700s before buyers return, he added.
But analysts noted the likely appointment of former Federal Reserve chair Janet Yellen as U.S. Treasury Secretary could boost bets for further fiscal and monetary stimulus and benefit bullion.
Gold is considered a hedge against inflation and currency debasement, likely to result from the unprecedented stimulus unleashed globally this year to ease the pandemic’s economic blow.
Silver fell 0.4% to $23.48 an ounce. Platinum rose 0.9% to $934.73, while palladium dropped 0.7% to $2,338.36.
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