Picture: 123RF/RONNARONG THANUTHATTAPHONG
Picture: 123RF/RONNARONG THANUTHATTAPHONG

Bengaluru — Gold eased on Wednesday after a sharp rise in the previous session, due to uncertainty over a US stimulus package, while progress in a Covid-19 vaccine development also weighed on the metal’s safe-haven appeal.

Spot gold fell 0.3% to $1,810.36/oz by 3.11am GMT, after jumping more than 2% on Tuesday, its biggest jump in nearly a month. US gold futures fell 0.4% to $1,812.60.

Top Senate Republican Mitch McConnell said the US Congress should include a fresh wave of coronavirus stimulus in a $1.4-trillion spending bill, as stimulus talks between treasury secretary Steve Mnuchin and House of Representatives speaker Nancy Pelosi were held on Tuesday. A bipartisan group of senators and House members also proposed $908bn worth of coronavirus relief measures.

“There’s a little bit of uncertainty over the stimulus deal to go through and given it’s at the lower end of the scale, it is not super supportive,” said Stephen Innes, chief global market strategist at financial services firm Axi.

While the talks are a step in the right direction on the fiscal spending front and signals further co-operation likely ahead, stimulus efforts are well below what the market was hoping for, Innes said.

Weighing further on bullion was news that US officials plan to begin vaccinating millions of Americans against Covid-19 as early as mid-December. While optimism over an economic recovery might continue to push investors away from gold, the downside is likely to be limited as real yields were still negative and can fall further if hopes for a stimulus were lifted, IG Markets analyst Kyle Rodda said.

Non-yielding gold, viewed as a hedge against inflation, usually benefits from lower interest rates that reduce its opportunity cost.

Silver fell 1.5% to $23.65/oz. Platinum dropped 1.2% to $988.33 and palladium was down 0.4% at $2,397.10.

Reuters

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