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Gold Down, But Little Changed En Route to Best Year in a Decade

Published 12/30/2020, 11:48 PM
Updated 12/30/2020, 11:51 PM
© Reuters.

© Reuters.

By Gina Lee

Investing.com – Gold was down on Thursday morning in Asia, but little changed as 2020 winds up what is set to be the yellow metal’s best year in a decade. A weaker dollar gave gold a boost but was outweighed by pressure from comments that a bill to increase U.S. stimulus checks is unlikely to get Senate approval soon.

Gold futures inched down 0.01% at $1,893.20 by 11:46 PM ET (4:46 AM GMT). The dollar, which usually moves inversely to gold, was down on Thursday.

Demands in the U.S. to increase the amount of the stimulus checks from $600 to $2,000 have been dealt a further blow, with Senate Majority leader Mitch McConnell refusing a quick vote on the bill on the increase. McConnell also warned that the bill had “no realistic path to quickly pass the Senate.”

Gold has seen gains of more than 24% in 2020, its best year since 2010, boosted by unprecedented stimulus measures rolled out by governments worldwide to combat the economic impact of COVID-19, alongside low interest rates from central banks.

On the COVID-19 front, the new strain of the virus first discovered in southeastern England in September continues to spread. California reported its first case of the B177 strain of the COVID-19 virus, while Colorado, which reported the U.S.’ first case, saw a second case.

The spread of this new, highly contagious strain overshadowed progress on the vaccine front. The U.K.’s Medicines and Healthcare products Regulatory Agency on Wednesday approved AZD1222, developed by AstraZeneca PLC (LON:AZN) and the University of Oxford, for emergency supply and active immunization of individuals 18 years or older.

In Asia, China approved BBIBP-CorV, one of the two COVID-19 vaccines by China National Biotec Group.

The approvals are in addition to regulatory approvals for Pfizer Inc (NYSE:PFE) and BioNTech SE's (F:22UAy) vaccine BNT162b2, as well as Moderna Inc's (NASDAQ:MRNA) mRNA-1273 vaccine, earlier in the month.

Data released earlier in the day also showed a slowdown in Chinese factory activity growth. December’s manufacturing Purchasing Managers Index (PMI) at 51.9, down from the reading of 52 in forecasts prepared by Investing.com and November’s 52.1 figure. The non-manufacturing PMI was 55.7, also down from November’s reading of 56.4.

Meanwhile, the Queen on Wednesday approved the post-Brexit trade deal struck between the U.K. and the European Union. The approval comes after the House of Lords gave the bill to approve the deal an unopposed third reading late on Wednesday and after MPs voted it through by 521 votes to 73.

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