December 14, 2020
Gold inches down as vaccine rollout counters U.S. stimulus hopes
(Reuters) - Gold prices eased on Monday as the rollout of a COVID-19 vaccine lifted riskier assets,
overshadowing expectations of more U.S. fiscal and monetary stimulus.
Spot gold fell 0.2% to $1,836.08 per ounce, while U.S. gold futures eased 0.2% to $1,839.90.
"The euphoria around a COVID-19 vaccine will likely overshadow further easing from the Federal Reserve and a fiscal relief package in the near term," said Howie Lee, an economist at OCBC Bank.
"But gold could rally in 2021 when the vaccine optimism dies down and investors' focus returns to rising inflation expectations due to the large swathe of monetary and fiscal stimulus the U.S. economy still requires."
The first shipments of Pfizer Inc and BioNTech SE's approved coronavirus vaccine in the United States began on Sunday, raising hopes for a faster economic recovery and lifting Asian equities.
But gold's losses were limited by hopes of further U.S. fiscal stimulus, with Reuters reporting that a $908 billion relief plan will be split in two in an effort to win approval and could be introduced as early as Monday.
A leading Democrat lawmaker also suggested his party might be willing to reach a compromise on the relief package.
The focus now turns to the U.S Federal Reserve's two-day policy meeting starting on Tuesday, with investors betting on increased purchases of longer-dated Treasuries to contain a rise in yields, pulling down the dollar.
Gold, considered a hedge against inflation and currency debasement, has gained 21% so far this year on the back of near-zero interest rates and unprecedented global stimulus.
Speculators raised their bullish positions in COMEX gold and silver contracts in the week to Dec. 8, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday.
Silver rose 0.2% to $23.97 an ounce, while platinum gained 0.8% to $1,017.34 and palladium gained 0.4% to $2,328.74.