Gold extended its drop, hitting the lowest level in four months after positive vaccine news, strong economic data and signs the US presidential power transition would pass smoothly.
Bullion prices sank on Monday after trading mostly in a range for weeks. It followed improved economic data from the US and an announcement that a Covid-19 vaccine developed by the University of Oxford and AstraZeneca Plc prevented a majority of people from getting the disease in a large trial.
Gold fell beneath a key level of support as investors shunned the haven asset, and the drop continued on Tuesday, as equity markets rallied. Traders will now have their eyes on the $1,800 an ounce mark, which represents a key support for gold, according to Ole Hansen, head of commodity strategy at Saxo Bank A/S.
“In the short term, short sellers may look for additional stops down toward support at $1,800, the 200-day moving average,” he said. “With vaccine news occupying the headlines, gold is likely to struggle.”
Gold drops to four-month low on virus progress, Biden transition