Gold declined from near its highest level in two weeks as investors weighed vaccine rollouts amid surging coronavirus infections in some parts of the world against fresh hopes for a stimulus deal in the US.
Treasury Secretary Steven Mnuchin said he presented a new $916 billion Covid-19 relief proposal to House Speaker Nancy Pelosi, in the first move by the Trump administration since Election Day to break a months-long standoff. Still, time is running short on passing a bill before Congress’ year-end break, with cases in the US surpassing 15 million.
Vaccine rollouts are being closely followed as infections surge in some parts of the world. US regulators gave early indications they may grant emergency-use authorisation to Pfizer’s vaccine, calling the shot highly effective with no safety issues.
Britain became the first country to start administering the vaccine to its population, kicking off the western world’s Covid immunisation campaign.
While vaccine developments have curbed demand for havens, bullion is still heading for the biggest annual gain in a decade amid the unprecedented amounts of stimulus used to cushion economies from the pandemic’s impact.
Global central banks are embarking on fresh waves of bond-buying, with the European Central Bank expected to increase its own purchase plans when it meets on Thursday.
“With the US elections over and the advent of vaccines, central bankers may re-evaluate their policies vis-à-vis the effects of mass inoculations” and stimulus with less urgency, said Avtar Sandu, a senior manager for commodities at Phillip Futures. Ultra-low yields and negative real interest rates are however expected to remain, and this should provide support for gold in the long term, he said.
Spot gold declined 0.7 per cent to $1,856.99 an ounce at 12.22pm in Singapore, after climbing to $1,875.39 on Tuesday, the highest intraday level since November 23. Silver dropped 1.1 per cent, platinum was little changed, and palladium slipped 0.1 per cent. The Bloomberg Dollar Spot Index fell 0.2 per cent.