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Gold set for third weekly decline as vaccine optimism weighs
[BENGALURU] Gold prices were set for a third straight week of declines as growing optimism over a coronavirus vaccine drove investors into traditionally riskier assets and out of the safe-haven metal.
Spot gold fell 0.2 per cent to US$1,807.86 per ounce by 3.35am GMT. US gold futures were steady at US$1,806.00.
Bullion was set to fall 3.3 per cent on the week.
Asian shares stalled near record highs on Friday as AstraZeneca faces tricky questions about the success rate of its vaccine candidate that could hinder its chances of getting speedy US and European Union regulatory approval.
"For the markets, I don't think that (doubts over the effectiveness of a vaccine) changes the perception there's going to be a vaccine coming sooner than previously expected," said IG Markets analyst Kyle Rodda.
Investors are starting to buy into the narrative that the economic recovery is going to gather steam in 2021 and that's driving investors to liquidate gold holdings, Mr Rodda added.
On the technical front, support for gold remains intact at US$1,800 an ounce, while silver continues to see supportive interest toward the psychological US$23 level, MKS PAMP said in a note.
Raising the prospect for further stimulus, the European Central Bank's chief economist warned tolerating "a longer phase of even lower inflation" would hurt consumption and investment.
Gold has gained 19.2 per cent this year driven by large stimulus measures that raised concerns of inflation, against which the metal is considered a hedge.
"With real interest rates remaining considerably low, the dollar structurally weak and with upcoming selection of (Janet) Yellen as the next US Treasury Secretary, the longer-term appeal of gold as safe-haven would remain good," Avtar Sandu, senior commodities manager at Phillip Futures, said in a note.
Silver fell 1 per cent to US$23.21 per ounce. Platinum dropped 0.7 per cent to US$954.93 and palladium was 0.5 per cent higher at US$2,394.02.