Gold eases on U.S. vaccine fillip for economic outlook

Gold edged lower on Monday as the rollout of a COVID-19 vaccine in the United States drove optimism in wider financial markets with investors banking on a resultant economic recovery.

Spot gold was 0.1pc lower at $1,836.80 per ounce by 9:34 a.m. EST (1434 GMT), having earlier fallen as much as 1pc to $1,819.35.

U.S. gold futures also eased 0.1pc to $1,841.00.

"We're seeing some keener risk appetite in the marketplace, as evidenced by rallying global stock markets, and that's putting some pressure on safe-haven gold," said Kitco Metals senior analyst Jim Wyckoff.

"A solidly lower U.S. dollar index may be limiting some of the selling pressure."

Lifting hopes that the tide is beginning to turn on the pandemic and boosting sentiment for equities, was news that the first shipments of coronavirus vaccines were speeding across the U.S., with inoculations possibly beginning as early as Monday.

Hopes of a global economic recovery and a decision to extend trade talks between Britain and the European Union also supported European shares.

Helping bullion, which is priced in U.S. dollars, was pressure on the greenback from hopes of a $908 billion COVID-19 relief package with lawmakers facing a midnight Friday deadline.

Gold, considered a hedge against inflation that could result from the unprecedented stimulus unleashed in 2020, has risen more than 20pc so far this year.

Investors were waiting for the U.S Federal Reserve's two-day policy meeting starting on Tuesday for cues on monetary policy.

"A fiscal deal is around the corner and meanwhile, the Fed has the ability to step into the fray," said Daniel Ghali, commodity strategist at TD Securities.

Silver rose 0.9pc to $24.12 an ounce, while platinum was up 1.1pc at $1,019.76 and palladium was down 0.6pc at $2,304.58.