Gold extends fall as investors shift to 'risk on' mode

Gold slid to a four-month low on Tuesday as progress on COVID-19 vaccines and hopes fueled by the White House transition prompted investors to flock to riskier assets.

Spot gold dropped 1.5% to $1,807.95 an ounce by 1:41 p.m. EST (1841 GMT), after touching its lowest since July 17 at $1,800.01.

US gold futures settled down 1.8% at $1,804.60.

"More optimism in regard to the economy, based on the vaccines has taken some of the safe haven status away from the gold market," said David Meger, director of metals trading at High Ridge Futures.

"Less political concern moving forward" has also reduced the need for safe havens, Meger added.

The Dow breached 30,000 points for the first time as investors bet on a swift economic recovery following progress on coronavirus vaccines and after US President-elect Joe Biden moved closer to take the reins of power in January with a formal nod.

"The game changer has been the ability of all the vaccines to show good promise," said George Gero, managing director at RBC Wealth Management, adding it is going to be a long climb back up for gold under these circumstances.

On Monday, safe-haven bullion lost 1.9% after another global drug company AstraZeneca announced promising trial results toward a vaccine.

Also, Biden is expected to nominate former Federal Reserve Chair Janet Yellen as US Treasury secretary, and investors see Yellen as a force for more fiscal action to combat the economic crisis unleashed by the pandemic.

Gold's slide also came despite a subdued dollar, which held close to a near three-month trough.

Bullion, a hedge against currency debasement and inflation, is still up over 19% this year, mainly driven by unprecedented pandemic-led global stimulus.

Elsewhere, silver dipped 1.2% to $23.30 an ounce, platinum jumped 3% to $955.26 and palladium was flat at $2,354.59.