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

A one-kilogram gold bar sits at Gold Investments Ltd. bullion dealers in this arranged photograph in London, U.K., on Wednesday, July 29, 2020.
Chris Ratcliffe | Bloomberg | Getty Images

Gold prices slid 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 0.6% lower at $1,827.55 per ounce, having earlier fallen as much as 1% to $1,819.35.
U.S. gold futures settled down 0.6% to $1,832.10.

"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 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 20% 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 fell 0.2% to $23.87 an ounce, while platinum was flat at $1,008.94 and palladium declined 0.4% to $2,310.24.