Gold beat a sharp retreat on Monday, sliding 2% after Pfizer said its vaccine was more than 90% effective in preventing COVID-19 based on initial data from a large study, sending stock markets soaring and denting safe-haven bullion’s appeal.
Spot gold slipped 1.8% to $1,917.22 per ounce by 1227 GMT. The decline erased gains from the metal’s climb to a near eight-week peak at $1,965.33 earlier in the session, which was driven by a weak dollar amid hopes for more stimulus following Joe Biden’s victory in the U.S. elections.
U.S. gold futures dipped 1.8% to $1,916.70.
“There’s some belief that this is going to be a driver for economic growth as we come out of the pandemic situation, so it’s positive news for the world, but negative news for gold,” said independent analyst Ross Norman.
“Maybe this is a bit of a honeymoon period for to-be President Biden and some good news on the vaccine. And not surprisingly, it’s taking the toll on gold.”
Pfizer and German partner BioNTech SE, the first drugmakers to show successful data from a large-scale clinical trial of a vaccine, said they expect to seek U.S. emergency use authorization later this month.
The news prompted sharp gains in stock markets, and set Wall Street up for a record.
Limiting gold’s declines and keeping it above $1,900, the dollar index steadied but held close to a more than 10-week low, bolstering appeal for gold among those holding other currencies.
Silver too joined gold’s slide, falling 2.6% to $24.93 per ounce.
Platinum fell 0.9% to $880.75, while palladium fell 1.8% to $2,446.24.
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