Biden-fuelled risk appetite keeps gold near four-month low

Bengaluru — Gold languished near a four-month low on Wednesday as appetite for riskier assets remained buoyed by the formal start of US president-elect Joe Biden’s transition to the White House and the hope a Covid-19 vaccine would be ready soon.

Spot gold eased 0.2% to $1,803.51/oz by 3.27am GMT. On Tuesday, it had hit its lowest level since July 17 at $1,800.01. US gold futures dipped 0.1% to $1,803.20.

“We are moving into a new phase in gold as vaccine developments are changing the regime of pandemic-caused disruptions and headwinds to growth that gold markets were pricing in,” said Lachlan Shaw, National Australia Bank’s head of commodity research. “If US real long yields range trade around current levels, it’s difficult to see gold breaking out and then sustaining a strong rally towards $1,900 and $2,000.”

US President Donald Trump gave the go-ahead for Biden to start receiving daily intelligence briefings, a sign he has all but accepted the election result, after Pennsylvania certified Biden’s victory in the battleground state.

The formal start of Biden’s transition to the White House and positive developments around a possible Covid-19 vaccine helped world shares scale a record peak, after an overnight surge saw the Dow crack 30,000 for the first time. A break below $1,800 could see more selling of gold and this move away from gold and towards risk assets could continue, said ED&F Man Capital Markets analyst Edward Meir, adding the metal should find some support near $1,750-$1,770.

Investors are now waiting for the release of minutes from the US Federal Reserve’s last meeting due at 7pm GMT. On the physical front, data on Tuesday showed China’s net gold imports via Hong Kong recorded its steepest monthly contraction since June in October.

Silver eased 0.2% to $23.20/oz. Platinum fell 0.3% to $958.32 and palladium was down 0.7% at $2,332.01.

Reuters