By Adam Claringbull
Investing.com – Gold was down on Wednesday morning in Asia as investor risk appetite grows on vaccine hopes and turning away from safe-haven assets.
Gold futures edged down 0.17% at $1,801.55 by 12:35 AM ET (4:35 AM GMT).
Gold has continued down as stocks boom, with global stocks reaching a record high, the U.S. Dow Jones Industrial Average has broken through the 30,000 mark, a new high. Investors are turning away from risk-averse assets as vaccine developments give confidence to economic outlooks across the globe. Safe-haven assets, such as gold, are being pushed down consequently.
Gold has fallen through the $1,800 mark for the first time since July.
Adding to the current wave of optimism is the official approval given to the U.S. presidential transition process given by Emily Murphy, director of the General Services Administration. There had been persistent concerns that President Trump would hold off allowing President-elect Joe Biden’s incoming administration access to both crucial state information and funding until the last minute, leading to a chaotic start for the new regime.
"Sentiment is running very hot as we come to the end of a cracker month for risk assets, so it does make you wonder whether the market is starting to exhibit signs of euphoria, and is due for a bit of a retracement in the short-term," IG Australia markets analyst Kyle Rodda told Reuters.
"But for all the risks the pandemic poses over the next few months ... market participants appear happy to look through it all, and position for a post-pandemic world," they added.
However, on the plus side, the Biden administration is widely expected to push for strong COVID-19 relief measures, especially as it has tagged ex-Federal Reserve Chair Janet Yellen for the U.S. Secretary of the Treasury role.
Yellen is widely regarded as an economic moderate, with an expressed interest in economic equality matters. As such, gold investors anticipate relief measures that will bring down the value of the greenback, and consequently boost longer term appetite for the yellow metal.