Gold prices tumble over 2% as vaccine progress slams precious metals

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Gold futures turned sharply lower Monday as investors unloaded the metal amid news on prospective vaccines and treatments for COVID-19 that may be momentarily undercutting demand for precious metals.

Drugmaker AstraZeneca said a study found the vaccine it is developing with the University of Oxford was up to 90% effective, with that news coming after Pfizer and its partner BioNTech, as well as drugmaker Moderna earlier this month also reported upbeat news on vaccines.

Distribution of vaccines could begin yet this year once the Food and Drug Administration grans approval, according to the head of Operation Warp Speed.

Vaccine progress has been a drag on bullion because it undercuts the haven appeal for gold and silver, dealers say.

“Gold isn’t particularly fond of all this vaccine news,” wrote Craig Erlam, senior market analyst at Oanda, in a research note.

On Monday, December gold GCZ20, -1.94%   GOLD, -4.12% shed $37.50, or 2%, to trade at $1,834.80 an ounce, after putting in a weekly of 0.7% on Friday, its second consecutive, according to FactSet data.

Many gold traders consider the trading area around $1,850 to represent support for gold.

The $1,850 level had provided “decent support” for gold, Erlam said. The next important support level is around $1,800, he said, adding that it could be “tested very quickly.”

Silver futures for December delivery SI00, -3.15% SIZ20, -3.15%,  meanwhile, lost 77 cents to trade at $23.61 an ounce, a decline of 3.1%, following a weekly skid for gold’s sister metal of 1.7%.

Optimism around vaccines and treatments for COVID-19 were helping foster buying in comparatively riskier equities over havens including precious metals, with the Dow Jones Industrial Average DJIA, 0.68% on the rise Monday and stocks in Europe mostly tilting higher to start the week.

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Metals markets, and the broader financial markets in the U.S., will be closed on Thursday in observance of Thanksgiving.

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