Prices fell 5.2% on Monday after US drugmaker Pfizer Inc said its investigational Covid-19 vaccine was over 90% effective based on initial trial results.
Central banks are unlikely to change their accommodative stance in the short to medium term, as it will take time for a vaccine rollout and a resumption of growth, inflation and the labor market, Lachlan Shaw said, Head of Commodity Research at National Australia Bank.
“If inflation expectations pick up due to increased economic activity from the vaccine, that should limit real US long yields and be a driving force behind gold. ”
Gold tends to benefit from a widespread stimulus as it is seen as a hedge against inflation and currency degradation.
While vaccine optimism boosted risk appetite, uncertainties continued to weigh on the impact of the surge in Covid-19 cases in the United States and Europe.
“I still think we have more stimulus coming and the Fed will keep rates low, while a vaccine is going to provide that reflationary boost … That’s why the markets are still holding onto gold,” said Stephen Innes, Head of Global Market. strategist of the financial services company Axi.
Dallas Federal Reserve Chairman Robert Kaplan said on Monday the resurgence of Covid-19 posed risks to the economy, while Cleveland Fed Chairman Loretta Mester said loan programs emergency response from the Fed were still needed.
Silver rose 0.2% to $ 24.12 an ounce. Platinum gained 0.2% to $ 868.45 and palladium rose 0.3% to $ 2,484.67.