Gold fell to a four-month low on Tuesday, hurtling towards the $1,800 psychological level as progress on a COVID-19 vaccine and hopes for a quick transition in the White House drove a shift to riskier assets.
Spot gold dropped 1.7% to $1,804.92 an ounce having touched its lowest since July 17 at $1,800.90. On Monday it lost as much as 2.2%. U.S. gold futures shed 1.9% to $1,802.20.
"More optimism in regard to the economy, based on the vaccines, has taken some of the safe haven status away from the gold market," said David Meger, director of metals trading at High Ridge Futures.
"Less political concern moving forward" has also reduced the need for safe havens, Meger added.
Wall Street opened higher after Joe Biden got a formal nod to transition into the White House, adding to the upbeat sentiment driven by encouraging vaccine developments from major drugmakers including AstraZeneca, Pfizer and Moderna.
"The game changer has been the ability of all the vaccines to show good promise," said George Gero, managing director at RBC Wealth Management, adding it's going to be a long climb back up for gold under these circumstances.
Also, Biden is expected to nominate former Federal Reserve Chair Janet Yellen as U.S. Treasury secretary, and investors see Yellen as a force for more fiscal action to combat the economic crisis unleashed by the pandemic.
Bullion's slide also came despite a subdued dollar, which held close to a near three-month trough.
Gold is still up about 19% so far this year, benefiting from its status as a hedge against likely inflation and currency debasement spurred by the unprecedented pandemic-led global stimulus.
Elsewhere, silver dipped 2% to $23.10 an ounce, platinum rose 0.9% to $934.93 and palladium dropped 1.1% to $2,329.18.
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November 24, 2020 at 09:10AM
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Gold extends slide as investors shift to 'risk on' mode - CNBC
"low" - Google News
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