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Gold Under $1800, Overrun By Risk-on Train

Published 11/24/2020, 10:15 AM
Updated 11/24/2020, 03:34 PM
© Reuters.

© Reuters.

By Barani Krishnan

Investing.com - Wall Street's runaway risk train showed no signs of slowing Tuesday, overrunning gold for a third straight day and sending it to sub-$1,800 levels as investors continued to bail out of havens on optimism over Covid-19 vaccine trials and cabinet nominees named by President-Elect Joe Biden.

Gold for December delivery settled down $33.20, or 1.8% at $1,804.60 on New York’s Comex. It earlier fell to $1,797.65, a low not seen since July 3 intraday bottom of $1,783.65.

With the combination of Monday’s rout, the benchmark U.S. gold futures contract has lost about $70, or 3.7%, in three sessions beginning Friday.

The spot price of gold, which reflects real-time trades in bullion, was down $33.88, or also about 1.8% lower, at $1,803.67 by 3:00 PM ET (20:00 GMT). Spot gold barely survived a foray into $1,700 territory, stopping at a four-month low of $1,800.42.

Gold’s collapse came as Wall Street’s Dow hit historic highs above 30,000 points in a rally that pulled the three major U.S. stock indexes up by about 1.5% each.

Adding to pressure on the yellow metal on Tuesday was options expiry for the December futures contract, traders said.

“It seems nothing can stop gold’s slide,” said Ed Moya, analyst at New York’s OANDA. “U.S. stocks must be taking their Xanax as coronavirus anxiety levels continue ease on vaccine optimism and the beginning of the Biden transition.”

Risk-on has hit fever-pitch on Wall Street since the progress reported on Monday by AstraZeneca (NASDAQ:AZN) in its Covid-19 vaccine.

According to the British-Swedish drug company, the product was 70% effective in protecting against the coronavirus and could reach 90% efficacy on a second dose. The shots could also be stored in an ordinary refrigerator and likely to be much cheaper than rival solutions from Pfizer (NYSE:PFE) and Moderna (NASDAQ:MRNA), which announced 95% efficacy rates over the past two Mondays for their vaccines but more challenging store conditions.

Gold, which hit $2,000 record highs on safe-haven buying back in August when there was little solutions to the Covid-19 outbreak, sunk 5% on the Nov. 9 announcement by Pfizer, and 3% over two days after the Moderna update.

Adding to this week's fervor in stocks was the go-ahead given by the White House late on Monday for the transition of President-Elect Joe Biden, so that he and his chosen team can escalate the fight against the COVID-19. Of his various cabinet picks, the one particularly lauded by Wall Street was former Federal Reserve Chair Janet Yellen as Treasury Secretary.

And while gold prices could go even lower, some analysts saw a rebound by as early as Wednesday.

“The lowest it will go, I think, will be $1,785,” said Phillip Streible, chief market strategist at Blue Line Futures. “I expect people to be clamoring to get back in at that point. Those who’ve been rotating out of gold and into bitcoin and what-not will be foolish not to buy gold at those levels.”

Latest comments

When the gold price is high
tell the when the gold price is Hight or Up
Vaccine news derailed this Gold train
It makes me laugh when I see investors drunk on the vaccine. The world economy has had its brakes slammed on hard and this doesn't get fixed easily. Big recessions occur after gentle economic braking so this will be interesting for the next 5 years. Gold will be the only thing standing even after Babylon has fallen.
If your coming from a bias view point of being long gold you might wanna take a 10,000 foot view
...Daily gamblers better known as traders are those who get dizzie at height and depressed by speculation .
It seems nothing can stop gold’s slide,” said Ed Moya, analyst at New York’s OANDA. Except options expiry lol
Gold is in buy area for long term investment
Yep! But i would stil wait a little bit
Today I bought more gold ~ it was _ clear that gold will trend dower after maiden win an January it will up
I dont think it has nothing to do with Biden at most with Trump administration for putting all hands in the delivery of a vaccine in record time.This was what pushed the market and possible a dead lock government.
I wholeheartedly agree with you.
Market is just waiting on stimulus to jump back on this band wagon
GO down so i can buy cheaper! JPM you ca do it
PRECIOUS METALS = YESTERYEARCRYPTO = FUTURE
Gold should reach $1450 by mid 2021
Or 3000
More likely 3000 wait when tention with china will rise
Sound a bunch of crystal ball talk lol
Gold will fizzle. Bitcoin will skyrocket.There's millions of tons of gold underground and will soon be harvested from asteroids. More supply and Less demand.
There's nothing backing crypto. unless it's sporydium
how high you are? harvesting from asteroid? its far away from this... we use "coal" for our rockets and you thing they will go there and pick up 10t and come back?
 hahahahahahah u ra faken retaard
I think it will back very soon
it will go down to about 1650 then it will bounce back to 1900-2000 by end of 2021
Really
Really
why
Bitcoin for life
yes around 1650 before the end of February would be good area to buy gold
Good luck with that
Gold may drop down to 1600 before bouncing back up to 2000 again
new world of all digital and on computer. A little blip in the system and gold remain.
Might be go down more
infected traders are selling gold to buy bitcoin
low down meaby $1790$
Gold will go down to 1500$
no way
Gooddd
Whyyyyy
Yellen's back!
Now I have a position Gold _7000 dollar
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