for-phone-onlyfor-tablet-portrait-upfor-tablet-landscape-upfor-desktop-upfor-wide-desktop-up

PRECIOUS-Gold dips as vaccine rollouts dent appeal

 (Adds comments, updates prices)
    * Vaccine euphoria likely to grip gold in near-term -analyst
    * Interactive graphic tracking global spread of coronavirus:
tmsnrt.rs/3mvcUoa

    By Nakul Iyer
    Dec 14 (Reuters) - Gold prices dipped on Monday as COVID-19
vaccine rollouts lifted riskier assets, overshadowing hopes for
further U.S. fiscal and monetary stimulus.
    Spot gold        fell 0.4% to $1,831.75 per ounce by 0746
GMT, while U.S. gold futures        eased 0.4% to $1,836.80.
    "The euphoria around a COVID-19 vaccine will likely
overshadow further easing from the Federal Reserve and a fiscal
relief package in the near term," said Howie Lee, an economist
at OCBC Bank.
    "But gold could rally in 2021 when the vaccine optimism dies
down and investors' focus returns to rising inflation
expectations due to the large swathe of monetary and fiscal
stimulus the U.S. economy still requires."
    The first shipments of Pfizer Inc         and BioNTech SE's
         coronavirus vaccine in the United States began on
Sunday, lifting Asian equities.                         
    But, limiting gold's losses were reports that a $908 billion
U.S. COVID-19 relief plan could be introduced as early as Monday
as a leading Democrat lawmaker suggested his party might be
willing to reach a compromise.
                                    
    Investors now await the U.S Federal Reserve's two-day policy
meeting starting on Tuesday with bets for increased purchases of
longer-dated Treasuries to contain a rise in yields, which also
weighed on the dollar.       
    "Gold could rise even if a fiscal stimulus deal isn't
reached as long as the Fed manages to compress yields with the
collapse in negotiations ahead of the meeting, potentially
necessitating more aggressive monetary action," OANDA analyst
Craig Erlam said. 
    Gold, considered a hedge against inflation and currency
debasement, tends to benefit from lower interest rates that
reduces its opportunity cost. 
    Silver        fell 0.1% to $23.88 an ounce, while platinum
       rose 0.9% to $1,018.21  and palladium        gained 0.3%
to $2,324.48. 

 (Reporting by Nakul Iyer in Bengaluru; Editing by Aditya Soni
and Uttaresh.V)
  

Breakingviews

Reuters Breakingviews is the world's leading source of agenda-setting financial insight. As the Reuters brand for financial commentary, we dissect the big business and economic stories as they break around the world every day. A global team of about 30 correspondents in New York, London, Hong Kong and other major cities provides expert analysis in real time.


Sign up for a free trial of our full service at https://www.breakingviews.com/trial and follow us on Twitter @Breakingviews and at www.breakingviews.com. All opinions expressed are those of the authors.

for-phone-onlyfor-tablet-portrait-upfor-tablet-landscape-upfor-desktop-upfor-wide-desktop-up