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Gold dips as vaccine progress offset worries over rising cases

Published 19/11/2020, 02:04 am
© Reuters
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* Pfizer to apply for emergency U.S. OK for vaccine

* Platinum market seen in deficit this year and next -WPIC

* Graphic tracking world spread of coronavirus: https://tmsnrt.rs/3mvcUoa (Updates prices)

By Sumita Layek

Nov 18 (Reuters) - Gold prices eased on Wednesday as optimism about Pfizer's successful vaccine trials countered concerns over rising coronavirus infections and bets for further economic support.

Spot gold XAU= was down 0.3% to $1,872.38 per ounce by 01:57 p.m. EST (1857 GMT). U.S. gold futures GCv1 settled down 0.6% at $1,873.90.

"The rollout of positive vaccine developments is reducing gold's lure as a safe haven. (Although) it still seems to be in a trading range, the big moves up seem to be finished for now," said ED&F Man Capital Markets analyst Edward Meir.

U.S. drugmaker Pfizer Inc (NYSE:PFE) PFE.N said it was set to apply for emergency U.S. authorization after final results from its vaccine trial showed a 95% success rate with two months of safety data. seem to be progressing quickly and there are several others also in the pipeline ... that should help the global economy recover and be net bearish for gold. But in the meantime, the fact that we're not out of the woods yet and need more stimulus seems to be offering some support," Meir said.

Gold, considered a hedge against inflation and currency debasement, has gained 24% this year, benefiting from massive global stimulus and near zero-interest rates.

"It is worth recalling that the driver of investment flows into precious metals has ultimately been sourced from a powerful impulse lower in real rates," TD Securities said in a note.

"The U.S. Federal Reserve's continued attempt to spark higher inflation expectations should suppress real rates deeper into negative territory. This will continue to drive investment appetite for precious metals, as capital seeks to shelter itself from increasingly negative real rates."

Silver XAG= fell 0.5% to $24.34 per ounce, palladium XPD= gained 1.3% to $2,348.78. Platinum XPT= climbed 1.9% to $942.53.

The World Platinum Investment Council projected a market deficit in 2020 and 2021.

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