Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold slid 0.8% to close under $1,862 as optimism about a promising COVID-19 vaccine boosted equities and the dollar, undercutting demand for safe havens like gold, silver, and bonds.

Just a few days after Pfizer and BioNtech announced a vaccine with 90% effectiveness in Phase 3 clinical trials, Russia declared 92% effectiveness for their own fast-tracked vaccine, called Sputnik V. The news comes against the background of sharply rising COVID infections and hospitalizations in many regions of the US and Europe.

The promise of new weapons in the fight against the devastating pandemic lifted risk appetite despite the grim spread of the virus. The Nasdaq jumped 1.6% behind strong performances by Netflix, Apple, and Amazon, which post strong revenues during stay-at-home orders. The Dow slid from early gains to mild losses as cyclical stocks gave way to high-growth tech shares.

Traders rotated out of US government bonds, pushing benchmark 10-year Treasury yields close to the 1% level. Higher yields are a headwind for gold because they increase the opportunity cost for hold the metal, which provides no yield of its own.

The dollar strengthened 0.3% as Forex traders left safe-haven currencies like the yen. A stronger dollar weighs on gold and other commodities priced in it for global trade by making them pricier overseas.

The other precious metals were also lower, with silver dropping 0.8% while platinum and palladium lost 2.8% and 6.3%, respectively.

At the Comex close: December gold slid $14.80 to $1,861.60; December silver dropped 20 cents to $24.27; January platinum lost $24.60 to $868.10; and December palladium tumbled $154.60 to $2,316.80 an ounce.