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Gold slips as equities hit record on optimism over virus treatment

Published 25/08/2020, 01:13 am
© Reuters.
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* S&P 500 and Nasdaq scale record levels

* Investors eye Fed Chair's address at Jackson Hole this week

* Interactive graphic tracking global spread of coronavirus: open https://tmsnrt.rs/3aIRuz7 in an external browser (Updates prices)

By Sumita Layek

Aug 24 (Reuters) - Gold prices fell on Monday as optimism over a U.S. health regulator's authorization of a COVID-19 treatment lifted Wall Street stocks to record highs.

Spot gold XAU= fell 0.5% to $1,929.12 an ounce by 2:35 p.m. EDT (1835 GMT), having jumped 1% to $1,961.40. U.S. gold futures GCv1 settled down 0.4% at $1,939.20.

"Gold is just consolidating right now with stock indexes at record highs. It really needs a bigger catalyst, it needs additional fiscal stimulus, it needs inflation to pick up, in order to get really going," said Phillip Streible, chief market strategist at Blue Line Futures in Chicago.

The S&P 500 and Nasdaq hit record highs after the U.S. Food and Drug Administration approved the emergency use of blood plasma in COVID-19 patients and on a report the Trump administration may fast-track a vaccine candidate. .N talks between top Democrats and Republicans on coronavirus aid legislation remained stalled. COVID-19 vaccine developments and improving economic data present near-term headwinds to gold, low and negative interest rates, a weaker U.S. dollar, and expectations for further stimulus keep the balance of risks to the upside," said Standard Chartered (LON:STAN) analyst Suki Cooper in a note.

Central banks worldwide have rolled out massive stimulus measures to alleviate the economic damage caused by the COVID-19 pandemic, but that has also increased the probability of rising inflation.

Investors are awaiting U.S. Federal Reserve Chair Jerome Powell's address to the bank's annual symposium in Jackson Hole, Wyoming, on Thursday for signs of how aggressively it will seek to handle the long-term recovery from the pandemic. other metals, silver XAG= fell 0.9% to $26.43 an ounce, platinum XPT= was down 0.5% at $914.22 and palladium XPD= eased 1.2% to $2,155.90.

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