Biden transition, vaccine hopes keep gold near four-month low
[BENGALURU] Gold languished near a four-month low on Wednesday as appetite for riskier assets remained buoyed by the formal start of US President-elect Joe Biden's transition to the White House and hopes a Covid-19 vaccine would be ready soon.
Spot gold eased 0.2 per cent to US$1,803.51 per ounce by 3.27am GMT. On Tuesday, it had hit its lowest level since July 17 at US$1,800.01.
US gold futures dipped 0.1 per cent to US$1,803.20.
"We are 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 US$1,900 and US$2,000." US President Donald Trump gave the go-ahead for Mr Biden to start receiving daily intelligence briefings, a sign he has all but accepted the election result, after Pennsylvania certified Mr Biden's victory in the battleground state.
The formal start of Mr Biden's transition to the White House and positive developments around a possible Covid-19 vaccine helped world shares scale a record peak, after an overnight surge saw the Dow crack 30,000 for the first time.
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A break below US$1,800 could see more selling of gold and this move away from gold and towards risk assets could continue, said ED&F Man Capital Markets analyst Edward Meir, adding the metal should find some support near US$1,750-US$1,770.
Investors are now waiting for the release of minutes from the US Federal Reserve's last meeting due at 7pm GMT.
On the physical front, data on Tuesday showed China's net gold imports via Hong Kong recorded its steepest monthly contraction since June in October.
Silver eased 0.2 per cent to US$23.20 per ounce. Platinum fell 0.3 per cent to US$958.32 and palladium was down 0.7 per cent at US$2,332.01.
REUTERS
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