By Adam Claringbull
Investing.com – Gold was down on Tuesday morning in Asia as more vaccine good news arrives and U.S. business activity rises at the quickest rate in five years. The U.S. dollar and risk-on activity are drawing investor interest away from the safe-haven metal.
Gold futures were down 0.90% at $1,821.25 by 12:56 AM ET (4:56 AM GMT).
The news that at least one vaccine, and possibly three, will be rolled out before Christmas. The U.S. has said that it will likely start vaccinations using the Pfizer Inc (NYSE:PFE) vaccine on around Dec. 12, while both Moderna Inc (NASDAQ:MRNA) and AstraZeneca's (LON:AZN) candidates are expected to be approved by various governments in the near future.
The perception that there is and end in sight for the COVID-19 pandemic is spurring investor positivity, with a drive toward higher risk assets sending stocks rocketing and, conversely, dragging gold down.
The dollar was also buoyant earlier in the session, with the double effects of good news on the U.S. business activity front and also, finally, an acceptance of a change of administration by U.S. President Donald Trump.
U.S. business activity has grown at the fastest rate in five years in November, with the U.S. manufacturing purchasing managers index (PMI) leading the way at its highest growth rate since 2014, with a reading of 56.7. The services PMI also exceeded expectations, rising to 57.7 in November.
Investors also await the minutes from the Federal Reserve's latest meeting, as well as further data for jobless claims and GDP, due on Wednesday before the Thanksgiving holiday.
Added to this boost for risk-positive investments is the news that Trump has finally allowed the official presidential transition to take place. Previously, he had refused to permit President-elect Joe Biden’s incoming administration access to critical government departments and funding.
The shift from Trump means that when the new administration takes over on Jan. 20, it will have had time to prepare and ensure an orderly transition, avoiding a lengthy, and possibly disruptive, period where it comes to grips with the functions of governing. The prospect of a less-tumultuous few months has decreased the appetite for safe-haven assets.