Gold Set to Post Decline For Third Consecutive Week
Arslan Butt • 1 min read
Early on Friday, gold is trading mostly unchanged as the US markets remained closed for Thanksgiving, but is all set to post a decline for the third consecutive week on the back of optimism surrounding possible vaccines against COVID-19. At the time of writing, GOLD is trading at a little above $1,809.
So far this week, gold prices have weakened by more than 3% amid reports about pharmaceutical companies announcing highly effective vaccines that can bring an end to the coronavirus pandemic. Markets cheered the news beginning with Pfizer’s announcement, followed by Moderna and AstraZeneca a few days later and moved away from the precious metal to trade riskier instruments instead.
The safe haven appeal of gold was further dented earlier this week after US President Donald Trump permitted government officials to begin the process of transition to President-elect Joe Biden and his team. This development served to ease significant uncertainty surrounding the results of the US presidential election, even though Trump maintains that he will continue to challenge the results through legal action.
Meanwhile, the yellow metal enjoys some support after recent comments from ECB’s chief economist pointed to the possibility of the central bank unveiling more stimulus next month. In addition, Tokyo’s core CPI experienced the steepest decline in over eight years, heightening the risk of deflation in Japan – the world’s third biggest economy, lending more support to the safe haven asset gold.