Gold prices have weakened and are trading bearish as the risk appetite in the markets receives a boost from promising news reports about possible vaccines against COVID-19. At the time of writing, GOLD is trading at a little above $,1803.
The safe haven appeal of gold has diminished significantly in recent sessions as three pharmaceutical companies announced effective vaccines that could put an end to the coronavirus pandemic in the coming months. Traders are cheering the possibility of economic recovery to begin once the vaccines start rolling out around the world, sending risk assets higher.
Gold has also come under pressure after uncertainty around the US presidential elections receded and President elect Joe Biden and his team begin the process of transition into the White House. On Monday, President Donald Trump gave GSA approval to start the transition of power to Biden so he can start receiving daily intelligence briefings.
However, losses in gold remain limited as the US dollar also trades weakly due to the improvement in the risk appetite in global markets. As we know, the precious metal shares a negative correlation with the greenback and makes gains when the reserve currency weakens, as it becomes more affordable for holders of other currencies to buy bullion.