Gold falls as vaccine hopes, US transition boost risk appetite

Bengaluru — Gold slipped on Tuesday as progress on a Covid-19 vaccine and a federal agency’s approval of US president-elect Joe Biden’s transition to the White House bolstered risk appetite, denting bullion’s safe-haven appeal.

Spot gold fell 0.6% to $1,824.91 an ounce by 3.32am GMT. It fell as much as 2.2% on Monday to hit a four-month low. US gold futures were down 0.8% at $1,823.90.

“The number of vaccines coming out is giving the market confidence that in six months, things are going to be better than what they are. The (gold) price is coming off as a result,” said Michael Langford, executive director at corporate advisory and consultancy firm AirGuide.

Asian equities traded higher after AstraZeneca said on Monday its Covid-19 vaccine could be up to 90% effective.

Biden on Monday was given the go-ahead by a federal agency to begin his transition to the White House, while US President Donald Trump wrote on Twitter that he was recommending his team to “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 said.

Analysts noted the likely appointment of former Federal Reserve chair Janet Yellen as US treasury secretary could boost the prospect for further fiscal and monetary stimulus and benefit bullion. Gold is seen as a hedge against inflation, likely to result from large stimulus.

Silver dropped about 1% to $23.35 an ounce. Platinum rose 0.8% to $933.93, while palladium fell 1.1% to $2,329.75.

Reuters