Gold dropped for a fourth day as investors weighed positive vaccine developments and a steady drawdown in bullion-backed exchange-traded funds against mounting restrictions to curb a jump in coronavirus cases.
Pfizer said that a final analysis of clinical-trial data showed its Covid-19 shot was 95 per cent effective, paving the way for the company to apply for US regulatory authorisation.
Still, the resurgence of infections is a cause for concern, with New York City shutting schools, Poland seeing record daily deaths, and Italy’s fatalities rising by the most in seven months.
Since hitting a record in August, bullion’s rally has stalled amid uncertainty over further stimulus measures and optimism over an effective vaccine, even as the virus continues to spread. In particular, worldwide holdings in gold-backed ETFs are starting to ebb, putting them on course for the first monthly contraction this year, according to initial data compiled by Bloomberg.
“Gold prices can be seen stuck in consolidation of late, balanced between the rising Covid-19 cases and the recent vaccine optimism,” said Jingyi Pan, market strategist at IG Asia. “Evidently the trajectory expected with the vaccine is a positive one, despite the lengthy process anticipated for mass vaccination. This had played to a decline in safe-haven demand for the forward-looking market, including in gold ETFs.”
Spot gold traded 0.5 per cent lower at $1,863.03 an ounce at 7:10 am in London, and has ticked down every day this week.