New Delhi: Gold prices slipped on Monday and was on track for its worst month in four years, as optimism over a Covid-19 vaccine-led economic rebound that propelled equities to record highs dulled the metal`s safe-haven appeal.
Spot gold fell 1.2% to $1,766.26 per ounce by 0301 GMT. Gold is down 5.9% so far this month, its biggest monthly decline since November 2016. U.S. gold futures dropped 0.5% to $1,772.60. “Covid-19 vaccine inspired optimism about an economic bounce is really eroding the attraction of safe-haven investments like gold… the breach of $1,800 is feeding into the market imagination and appears to be another trigger,” said Michael McCarthy, chief strategist at CMC Markets.
Covid-19 vaccine optimism drove the dollar to a more than two-year low and put world stocks on course for a record month of gains. Also bolstering risk sentiment was data that showed China`s factory activity expanded at the fastest pace in more than three years in November.
Gold is seen as a hedge against inflation likely to result from monetary stimulus. Wall street bank Citi expects bullion`s sell-off to taper in December with support in the mid $1700s. “A renewed push above $2,000/oz in the next 3-6 months seems likely,” the bank added in a note, citing its bearish dollar outlook and low-interest rates as tailwinds.
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