Gold fell to a one-week low on Thursday as the dollar regained momentum, while overall optimism that advancements in vaccine development would speed an economic recovery also eroded bullion’s safe haven appeal.
Spot gold fell 0.5% to $1,862.16 per ounce by 0953 GMT, having earlier hit its lowest since Nov. 9 at $1,854.60.
U.S. gold futures slipped 0.7% to $1,861.20.
Gold has been a victim of optimism driven by news of headway towards a vaccine against the coronavirus, with the little dollar strength pushing it towards the bottom end of its range, said Michael Hewson, chief market analyst at CMC Markets UK.
“And U.S. fiscal stimulus remains an issue because (Donald) Trump hasn’t as yet conceded the presidential election, so fiscal support remains far away.”
The dollar, considered a rival safe haven, was up 0.3% versus rivals, benefiting from uncertainties over a spike in new coronavirus cases in the United States and resultant restrictions.
The rising cases, in Europe as well, pushed world stocks further off record peaks that had been scaled after promising vaccine announcements from Pfizer and Moderna.
The vaccines could be ready for U.S. authorisation within weeks, U.S. Health and Human Services Secretary Alex Azar said on Wednesday.
“In the short-term, (gold) prices may continue to drift lower towards $1,800,” said Vincent Tie, sales manager at Silver Bullion.
Gold is still up about 23% this year, boosted by its appeal as a hedge against likely inflation and currency debasement that may follow the unprecedented stimulus globally.
“What hasn’t changed is the prospect of near-term economic damage due to rising virus cases,” said Hewson, adding that central banks might have to do the “heavy-lifting” in the short-term.
Investors awaited U.S. jobs data at 1330 GMT for evidence on the state of the economy.
Silver dipped 1.5% to $23.95 per ounce. Platinum fell 0.7% to $936.06, while palladium eased 0.7% to $2,312.97.
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