Gold prices were lower in Monday’s trading, heading towards its worst month in four years.
With just a few hours trading to go at the time of writing, Gold, trading 0.5% lower, looks like closing November almost 6% down.
Heaping pressure on the precious metal has been news of progress in Covid-19 vaccines. This has sparked a risk-on appetite amidst the diminishing requirement to hedge against an economic collapse as money is being diverted from safe-haven assets like commodities and gold, into riskier markets and assets such cryptocurrencies.
With President-elect Joe Biden announcing the start of a formal transition of power from Trump’s administration to his, much of the cloud’s uncertainty of the markets were lifted.
A series of positive announcements on the progress of the Covid-19 vaccine trials over the last weeks have ensured the price of the precious metal has been subdued. Silver too saw declines, down 3.7% for November.
Analysts Speak on Gold
Ed Moya, senior markets strategist at New York’s OANDA said:
“Today’s stock market weakness is most likely a month-end story and not the beginning of massive year-end profit-taking,”
“Gold will likely see strong support in mid-December as the stimulus trade will be boosted by the ECB and Fed,”
“Gold is vulnerable to a break of the $,750 level, which could see momentum support a drop towards the $1,700 region. Gold’s longer-term outlook is still bullish, but the short-term pain is having many abandon the trade for now. Once the stimulus trajectory improves, gold should stabilize and target the $1,850 level.”
Sunil Kumar Dixit at SK Dixit Charting in Kolkata, India, added:
“Failure to hold above the critical support of $1,748 may cause further downside in gold towards $1,688 and $1,660 which will be a potentially strong and hard floor for yet another bull run after healthy consolidation,”
