Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold plunged 5% to close under $1,855 after the announcement of a promising coronavirus vaccine sparked a massive rally in equities, undercutting demand for safe-haven assets. It was the metal's biggest one-day percentage loss in more than seven years.

Pfizer and Germany-based BioNTech announced a vaccine candidate that is 90% effective for preventing COVID-19. The joint venture exceeded expectations in crucial Phase 3 trials on participants with no previous evidence of the virus. The welcome news came as the US case total surpassed 10 million.

Wall Street rallied sharply on the breakthrough, with the Dow surging than 1,200 points, or 4.2%, to a new intraday high before pulling back to gain of more than 800 points. The Global Dow jumped more than 4%.

Risk appetite was already elevated after Joe Biden was projected winner of the 2020 presidential election by most major news agencies over the weekend. A Biden administration is widely viewed as sympathetic to aggressive stimulus and infrastructure spending to support the economy.

Benchmark 10-year US Treasurys sold off, boosting yields by nearly 13 basis points, as euphoric investors exited safe havens. Yields on European sovereign bonds also rose sharply.

Rising yields can pressure gold and silver because they increase the opportunity cost for holding them metals, which provide no yield themselves.

The dollar added 0.6% against major rivals on speculation that an effective vaccine will accelerate the global economic recovery and reduce the need for unprecedented monetary easing from most major central banks.

The other precious metals were also lower, with silver plummeting 7.6% while platinum and palladium lost 3.6% and less than 0.1%, respectively.

At the Comex close: December gold fell $97.30 to $1,854.40; December silver lost $1.96 to $23.70; January platinum dropped $32 to $867.40; and December palladium slipped 80 cents to $2,499.20 an ounce.