(Reuters) – Gold prices were set for a second consecutive weekly drop on Friday as the metal’s appeal was put under pressure by promising COVID-19 vaccine trials and news from the US Treasury ending the emergency loan programs.
Spot gold plunged 0.1% to $ 1,866.28 an ounce at 6:11 am GMT and was down 1.1% for the week.
US gold futures rose 0.3% to $ 1,867.90.
In a letter to U.S. Federal Reserve Chairman Jerome Powell, U.S. Treasury Secretary Steven Mnuchin said the $ 455 billion allocated to the Treasury under the CARES Act should be in place of Congress for reallocation. Global stocks slid on Friday following his comments.
“If the Fed starts cutting back on its aid program, it could be a bit tight on gold again … The currency depreciation argument that has supported gold may weaken,” Lachlan said. Shaw, head of commodities research at the National Australia Bank.
Gold, seen as a hedge against inflation and currency degradation, has gained 23% this year, mostly benefiting from unprecedented stimulus measures unveiled to cushion the impact of the pandemic.
“It’s going to be a huge bumpy race (for gold) while we wait for stimulus to arrive,” said Stephen Innes, chief global market strategist at financial services firm Axi. “He’s now planning $ 1,900 at year-end.”
Meanwhile, AstraZeneca data AZN.L and the University of Oxford have shown that their potential COVID-19 vaccine produced a strong immune response in the elderly, allaying concerns fueled by the intensifying pandemic.
Silver rose 0.1% to $ 24.12 an ounce. Platinum and palladium rose 0.4% to $ 955.09 and $ 2,333.69, respectively.
Reporting by Eileen Soreng in Bengaluru; Edited by Ramakrishnan M. and Subhranshu Sahu