Gold declined from a two-week high as investors weighed vaccine roll-outs against surging Covid-19 cases and fresh hopes for a US stimulus deal.
US regulators gave early indications they may grant emergency-use authorisation to Pfizer Inc.’s shot, calling it highly effective with no safety concerns. Trial results published Tuesday found that the vaccine developed by the University of Oxford and AstraZeneca Plc is safe and effective, though more analysis will be required to see how well it works in people over 55.
On the stimulus front, Treasury Secretary Steven Mnuchin presented a $916 billion coronavirus relief proposal to House Speaker Nancy Pelosi, opening up a potential new path to a year-end deal. The offer crucially has the support of Senate Majority Leader Mitch McConnell, though its omission of supplementary jobless benefits remains a sticking point with Democrat leaders.
While vaccine developments have curbed haven demand, bullion is still heading for the biggest annual gain in a decade amid unprecedented amounts of stimulus to prop up economies. Top central banks are embarking on fresh waves of bond-buying, with the European Central Bank expected to increase its purchase plans when it meets on Thursday.
“The gold price is likely to close 2020 with a notable plus, despite the sizable losses in autumn,” Carsten Fritsch, an analyst at Commerzbank AG, wrote in a note. “We do not expect a change in the ultra-expansionary monetary and fiscal policy despite the upcoming vaccinations.”
Spot gold declined 0.5% to $1,860.85 an ounce by 10:02 a.m. in London, after touching the highest since Nov. 23 on Tuesday. Silver dropped 1%, while platinum was steady and palladium edged lower. The Bloomberg Dollar Spot Index fell 0.2%.
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