SINGAPORE: Gold fell in Asian trade on Wednesday as the formal start of Joe Biden’s transition to the White House and optimism over coronavirus vaccines dented bullion’s safe-haven appeal.
Spot gold eased 0.1% to $1,805.00 per ounce by 0648 GMT. On Tuesday, it hit its lowest since July 17 at $1,800.01.
US gold futures dipped 0.1% to $1,802.80.
“We’re moving into a new phase in gold as vaccine developments are changing the regime of pandemic-caused disruptions and headwinds to growth that gold markets were pricing in,” said Lachlan Shaw, National Australia Bank’s head of commodity research.
“If US real long yields range trade around current levels, it’s difficult to see gold breaking out and then sustaining a strong rally towards $1,900 and $2,000.”
A break below $1,800 could see more selling of gold and this move towards assets considered higher risk could continue, said ED&F Man Capital Markets analyst Edward Meir, adding bullion should find some support near $1,750-$1,770.
But, Wall Street bank Goldman Sachs maintained its bullish near-term forecast for gold, terming the current correction a “churn” before prices go up again as “more evidence of inflation emerges.”
Lower interest rates reduce the opportunity cost of holding non-yielding gold, which has gained more than 18% this year given its status as a hedge against likely inflation spurred by the massive stimulus unleashed globally.—Reuters
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