Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold slipped another 0.4% to close at a five-month low under $1,781 as optimism about promising vaccines and lack of movement on fiscal stimulus weakened demand for safe-haven assets.

Moderna said today its vaccine candidate was 94.1% effective in crucial Phase 3 trials. The drug maker joins Pfizer/BioNTech and AstraZeneca in applying for emergency authorization from the FDA, which could make vaccines available to frontline workers within weeks.

Hopes for an end to the pandemic drove equity markets into a frenzy in November, propelling the S&P 500 more than 10% higher for its best November ever. The Dow was even stronger, surging more than 11% for its best month since 1987.

All three major indexes weakened today, however, as traders took profits from the big month and squared their books. The Dow and S&P 500 slipped 1% and 0.6%, respectively, while the Nasdaq dipped 0.1%.

The vaccine-driven upsurge in risk appetite caused safe havens to struggle in November, knocking gold 5.6% lower for its worst month in four years while silver shed 5.1%.

Both metals were also pressured by the inability–or refusal–of Congress to pass another stimulus package to help workers, small businesses, and state governments ravaged by the aggressive spread of the virus. Like monetary easing from the Fed, fiscal stimulus is typically bullish for gold and silver because it raises the risk of long-term inflation and currency devaluation.

New manufacturing data for November suggest the recovery is slowing further, underscoring the need for additional aid. The Chicago Business Barometer weakened for a second month and the Dallas Fed region reported a sharp slowdown in factory activity. Meanwhile, first-time jobless claims rose for two straight weeks for the first time since May.

The other precious metals were mixed, with silver and palladium dropping 0.2% and 1.4%, respectively, while platinum added 0.1%.

At the Comex close: February gold slid $7.20 to $1,780.90; March silver dropped 5 cents to $22.59; January platinum added $1.10. to $965.90; and March palladium fell $33.80 to $2,405.90 an ounce.