Gold declined with the dollar as investors weighed growing optimism over a coronavirus vaccine against surging cases in many parts of the world.
Bullion extended last week’s loss after the dollar weakened and as AstraZeneca Plc said its vaccine prevented most people from developing Covid-19, marking another promising development in the quest to end the pandemic. Separately, US vaccinations will “hopefully” start in less than three weeks, according to the head of the federal government’s program to accelerate the production of a shot.
Gold prices last week edged near the lowest since July as hopes that a vaccine could bolster economic growth buoyed markets and curbed demand for haven assets. Still, the US is now averaging almost 110,000 more daily cases than a month ago, while there’s been a resurgence in infections in Europe and parts of Asia.
A major selloff from gold exchange traded funds that’s undermined confidence in the metal’s prospects paused on Friday, as the products registered a small inflow, an initial tally by Bloomberg showed. The funds were crucial to bullion’s rally to a record in August, but dropped to a two-month low last week.
Spot gold declined 0.3% to US$1,867.04 ($2,507.50) an ounce at 1:59 p.m. in London, after falling 1% last week. Silver declined 0.4%, while palladium rose. The Bloomberg Dollar Spot Index touched the lowest since April 2018.
Meanwhile, investors are keeping an eye on stimulus prospects. There are growing predictions the Federal Reserve will unveil more monetary action when it meets in mid-December. That view comes after the central bank said it will comply with a Treasury Department request to return unused funds meant to backstop five emergency lending programmes.
