February 24, 2024

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Gold sinks as equities soar on vaccine merriment; Stimulus support hopes

December 9 (Reuters) – Gold prices eased on Wednesday on encouraging vaccine developments, but hopes for more US stimulus hit a two-week high in the previous session.

Spot gold fell 0.3% to 8,865.46 per ounce at 0309 GMT, hitting a high of $ 1875.07 on Tuesday, November 23, while US gold futures fell 0.3% to $ 1,870.20.

“Although vaccines are being made, gold still contains some ammunition from all stimuli … (stimulus) provides gold with a lot of tailwinds by the end of the year,” said Edward Mir, analyst at ED&F Man Capital Markets.

The Trump administration on Tuesday proposed a $ 916 billion package, including responsible protections and state and local government assistance, which prominent Democrat and Republican lawmakers saw as progress in ongoing stimulus talks. Gold appears to be a hedge against inflation as a result of the unprecedented stimulus into the economy this year.

To boost Asian shares to record levels, Johnson & Johnson said it could receive the final phase trial results of the single-dose COVID-19 vaccine it is developing earlier than expected Pfizer Inc. has removed the next hurdle in the race for emergency vaccine approval in the United States, with a regulator releasing documents that raise new issues about its safety or effectiveness. Michael Longford, executive director of corporate guidance and consultancy firm AirGuide, said stimulus measures were crucial as it weakens the dollar and produces more liquidity into gold.

He said markets expect the stimulus to come by next week and gold will reach $ 1,900 by the end of this year.

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Silver fell 0.7%. Platinum was up 0.6% at $ 1,028.17 and Palladium was up 0.1% at 31,311.87.

(Nakul Iyer Reporting in Bangalore; Ramakrishnan Editing and Editing)

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