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Nov. 30, 2020, 2:49 p.m. EST

Gold ends at a 5-month low as vaccine news pulls prices down by nearly 6% in November

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Myra P. Saefong and Mark DeCambre

Gold futures declined on Monday, capping a troubling month for the haven asset that saw prices mark their lowest settlement since early July, following a loss of nearly 6% for the month of November.

February gold /zigman2/quotes/210035429/delayed GCG21 -0.10% fell $7.20, or 0.4%, to settle at $1,780.90, after futures lost over 4% last week, marking the steepest weekly slide since Sept. 25, based on the most-active contract. Monday’s settlement was the lowest since July 1.

Gold futures lost 5.6% for the month, according to Dow Jones Market Data. Prices trade more than 1% below their long-term, 200-day moving average that stands at $1,806.15, according to FactSet data.

The skid for gold has mostly comes on the back of reinvigorated enthusiasm for assets perceived as risky, like stocks, as apparent progress on vaccines has emboldened bullish equity investors, driving buying away from safe-haven bullion.

On Monday , Moderna Inc. /zigman2/quotes/205619834/composite MRNA -0.05% provided the latest update on potentially effective remedies for the deadly pandemic derived from the novel strain of coronavirus, saying its experimental drug showed 94.1% efficacy in final trials and that it plans to request an emergency-use authorization from the U.S. Food and Drug Administration, as early as Monday. The authorization could make the COVID-19 vaccine candidate available to front-line workers in the coming weeks.

“Clearly the gold and silver trade continue to ‘look through’ the unrelenting flare of infections in the U.S., as prices continue to fall sharply off lofty vaccine expectations,” analysts at Zaner Metals wrote in a daily note. “Furthermore, gold and silver prices have continued to fall sharply despite the assistance of a fresh downside breakout in the dollar.” 

The positive vaccine news has weighed on dollar-pegged precious metals, even as the buck continued a trend of weakness that would ordinarily bolster the case for foreign buyers using weaker currencies to purchase the precious commodity.

The ICE U.S. Dollar Index /zigman2/quotes/210598269/delayed DXY +0.08% , a measure of the greenback against a half-dozen currencies, touched 91.506 on Monday, its lowest level since around April of 2018, though it was last up for the session at 91.884. The dollar index traded down 2.3% for the month.

Gold has fallen even as the equity markets have started the week with losses , wrote Fawad Razaqzada, market analyst at ThinkMarkets, in a Monday research note.

The analyst, however, believes that gold’s decline may be capped at around this point as the dollar weakens.

“If the weakness for the dollar persists, this should prevent gold prices [from falling] further,” he said, also noting that government bond yields also have seen tepid moves. Lower yields can also buoy gold buying because the commodity doesn’t offer a coupon.

The 10-year Treasury rate /zigman2/quotes/211347051/realtime BX:TMUBMUSD10Y 0.00% was yielding 0.84% on Monday. Bond prices and yields move in opposite directions.

“What’s more, government bond yields have stopped going higher as investors realize the road to economic recovery is going to be a long bumpy one, despite optimism surrounding vaccines and hopefully the potential return to normal life,” Razaqzada said.

March silver /zigman2/quotes/211961204/delayed SIH21 +0.22% , the most-active contract, lost 5 cents, or 0.2%, to settle at $22.593 an ounce, after registering its sharpest weekly fall since late September on Friday. Silver, based on the finish for the most-active contract on Oct. 30, lost 5.1% for the month.

Copper, meanwhile, ended higher, with the March contract /zigman2/quotes/210055581/delayed HGH21 +0.22% up 0.6% at $3.438 a pound, with prices up 12.6% for the month.

“The copper market continues to be the ‘odd man out’ in metals and most commodity markets, with prices surging higher despite weakness in equities, signs of renewed U.S./Chinese tensions and escalating Chinese/Australian tensions,” said analysts at Zaner Metals.

“However, the copper market continues to anticipate strong demand from China and the maintenance of generally tight global supply,” they said.

Rounding out action among the Comex metals, January platinum /zigman2/quotes/214899298/delayed PLF21 -0.62% finished at $965.90 an ounce, up 0.1% for the session, to post a nearly 13.9% rise from the Oct. 30 settlement. March palladium /zigman2/quotes/215784886/delayed PAH21 -0.21% lost 1.4% to $2,405.90 an ounce, with the contract roughly 8% higher for the month.

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US : U.S.: Nymex
$ 1,828.00
-1.90 -0.10%
Volume: 39,563
Jan. 18, 2021 12:05a
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/zigman2/quotes/205619834/composite
US : U.S.: Nasdaq
$ 129.65
-0.07 -0.05%
Volume: 15.77M
Jan. 15, 2021 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$51.30 billion
Rev. per Employee
$72,541
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90.84
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Jan. 18, 2021 12:05a
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/zigman2/quotes/211347051/realtime
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BX : Tullett Prebon
1.09
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Jan. 17, 2021 4:58p
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$ 3.61
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Volume: 13,779
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