Gold set for longest weekly losing streak since June on vaccine

Gold declined, heading for a third straight week of losses as positive vaccine news and a clearer political picture continued to undermine the haven.

Bullion fell steeply on Monday after news of AstraZeneca Plc’s effective vaccine and positive U.S. economic data hit demand. The metal is now hovering over US$1,800 an ounce amid a more mixed outlook for the recovery from the pandemic.

Applications for U.S. state jobless benefits unexpectedly rose in the first back-to-back increase since July, a report Wednesday showed, while Astra’s shot looks like it is heading for an additional global trial as the drugmaker tries to clear up uncertainty surrounding the initial results.

U.S. President Donald Trump said he will relinquish power if the Electoral College affirms Democrat Joe Biden’s win, a sign the transfer to the new administration will be peaceful. Still he signaled he may never formally concede defeat, and may skip the Democrat’s inauguration.

Money continued to exit gold exchange-traded funds, which are now headed for their first monthly outflow this year. The funds have been a crucial support pillar for bullion in 2020, so their current erosion has significant implications for the price.

“Gold has moved into the next ‘down-leg’ of its correction phase,” according to United Overseas Bank Ltd. market strategist Quek Ser Leang. A break of the support zone of between US$1,760 and US$1,780 would open up the way for further weakness toward the US$1,600s, he said.

Spot gold fell 0.3 per cent to US$1,810.40 an ounce at 9:25 a.m. in London, heading for a weekly decline of 3.2 per cent. Silver dropped 0.5 per cent, while platinum fell and palladium gained. The Bloomberg Dollar Spot Index declined 0.2 per cent.