Gold on track for third weekly decline
Bullion set to fall 3.3% this week as investors head to riskier assets
Bengaluru — Gold prices were set for a third straight week of declines as growing optimism over a coronavirus vaccine drove investors into traditionally riskier assets and out of the safe-haven metal.
Spot gold fell 0.2% to $1,807.86/oz by 3.35am GMT. US gold futures were steady at $1,806.00/oz.
Bullion was set to fall 3.3% on the week. Asian shares stalled near record highs on Friday as AstraZeneca faces tricky questions about the success rate of its vaccine candidate that could hinder its chances of getting speedy US and EU regulatory approval.
“For the markets, I don’t think that [doubts over the effectiveness of a vaccine] changes the perception there’s going to be a vaccine coming sooner than previously expected,” said IG Markets analyst Kyle Rodda.
Investors are starting to buy into the narrative that the economic recovery is going to gather steam in 2021 and that is driving investors to liquidate gold holdings, Rodda added.
On the technical front, support for gold remains intact at $1,800/oz, while silver continues to see supportive interest towards the psychological $23 level, MKS PAMP said in a note. Raising the prospect for further stimulus, the European Central Bank’s chief economist warned tolerating “a longer phase of even lower inflation” would hurt consumption and investment.
Gold has gained 19.2% this year driven by large stimulus measures that raised concerns of inflation, against which the metal is considered a hedge.
“With real interest rates remaining considerably low, the dollar structurally weak and with upcoming selection of [Janet] Yellen as the next US treasury secretary, the longer-term appeal of gold as a safe-haven would remain good,” Avtar Sandu, senior commodities manager at Phillip Futures, said in a note.
Silver fell 1% to $23.21/oz. Platinum dropped 0.7% to $954.93/oz and palladium was 0.5% higher at $2,394.02/oz.
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