Slight drop in gold prices following announcement of deployment of covid-19 vaccine
Spot gold plunged 0.8% to $ 1,824.38 an ounce on Monday, December 14, after falling below $ 1,820 an ounce earlier in the session. US gold futures also fell 0.8% to $ 1,827.70 an ounce in New York, reports Mining News Pro
European equities and US equity futures started the week on a positive note, with the first shipments of the Pfizer-BioNTech SE vaccine in the United States on Monday morning.
“We are seeing a stronger risk appetite in the market, as evidenced by the rally in global stock markets, and this is putting some pressure on safe-haven gold,” Jim Wyckoff, senior analyst at Kitco Metals, told Reuters. “A significantly lower US dollar index could limit some of the selling pressure. “
Meanwhile, the same source reports, a bipartisan group of lawmakers plan to unveil a $ 908 billion relief bill in the United States on Monday, although a negotiator said there was no guarantee that the Congress would adopt it.
Seen as a hedge against inflation that could result from the unprecedented stimulus measures unleashed during the covid-19 pandemic, the O has risen by more than 20% so far this year.
However, the bullion is heading for its first quarterly loss since 2018 as vaccine progress and signs of recovery reduce demand for the safe-haven metal, even as major central banks continue to offer support to economies.
The markets are on alert this week. Investors will be closely following the Federal Reserve’s last meeting of the year where new guidance on its asset purchase program could emerge.
“A tax deal is imminent and in the meantime, the Fed (Editor’s note: the US Federal Reserve) has the ability to jump into the fray,” said Daniel Ghali, commodities strategist at TD Securities.
