NEW YORK: Gold dropped to a five-month low in early New York trade on Monday and was on track for its worst month in four years as optimism over a swift vaccine-fuelled economic recovery dented allure for safe havens. Spot gold was down 0.8% at $1,773.56 per ounce by 10:11 a.m. EST (1511 GMT), having earlier hit its lowest level since July 2 at $1,764.29, and has shed 5.6% so far this month.
US gold futures dropped 0.4% to $1,780.10 per ounce.
"They (investors) are abandoning gold because they feel that the vaccine is going to open up the markets at some point and it looks like the transition is going to be orderly," said George Gero, managing director at RBC Wealth Management.
"It is going to be a long road ahead for gold because there does not seem to be any need for the haven at this time."
Gold's slide came despite a subdued dollar, which hit its lowest level in two and a half years. The prospect of a vaccine-led economic recovery next year has put world shares on track for a record-breaking month.
Data that showed China's factory activity expanded at the fastest pace in more than three years in November was also prompting a rush to risk. Investors are now eyeing a congressional testimony by US Federal Reserve Chairman Jerome Powell this week.
"Traders and investors are exhibiting little risk aversion recently, amid no geopolitical hotspots at present, Covid-19 vaccine hopes and an apparent smoother transition of US presidential duties seen," Kitco Metals senior analyst Jim Wyckoff said in a note.
"That's all bearish for the safe-haven metals."
Silver fell 1.6% to $22.34 an ounce, on track for a 5.5% fall on a monthly basis. Platinum rose 1.3% to $975.84, while palladium slipped 0.7% to $2,407.51.
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