Gold falls to 4-month low as stocks jump on strong U.S. data

By Shreyansi Singh (Reuters) - Gold fell nearly 2% to its lowest in four-months on Monday as better-than-expected U.S. business activity data and optimism over progress in COVID-19 vaccines boosted hopes for a swifter economic rebound and drove investors towards riskier assets.

Reuters November 24, 2020 00:06:32 IST
Gold falls to 4-month low as stocks jump on strong U.S. data

Gold falls to 4month low as stocks jump on strong US data

By Shreyansi Singh

(Reuters) - Gold fell nearly 2% to its lowest in four-months on Monday as better-than-expected U.S. business activity data and optimism over progress in COVID-19 vaccines boosted hopes for a swifter economic rebound and drove investors towards riskier assets.

Spot gold dipped 1.8% to $1,836.71 per ounce by 10:29 a.m. EST (1529 GMT), after falling to its lowest since July 21 at $1,834.95. U.S. gold futures shed 2% to $1,834.80.

Stocks jumped after data showed U.S. business activity in November expanded at its fastest rate in more than five years, pointing to a recovery from the pandemic's economic damage.

"Gold broke below the key $1,850 level after an unbelievably strong U.S. PMI release just dampened the need for stimulus. No one was expecting such strong readings in both services and manufacturing," said Edward Moya, senior market analyst at OANDA.

The upbeat data came after Britain's AstraZeneca said its vaccine could be around 90% effective without any serious side effects.

Further denting bullion, the dollar rose against rivals, while the benchmark 10-year Treasury yield also jumped. [USD/][US/]

Gold's break below $1,850 triggered a wave of sell stops, said Phillip Streible, chief market strategist at Blue Line Futures in Chicago.

Gold, considered a hedge against inflation and currency debasement, has gained over 21% this year, mainly benefiting from the economic damage from the pandemic and the resultant global stimulus measures.

"While we do expect gold to go onto the defensive when the global economies start to show sustainable recoveries, the tailwinds behind the market have not yet been fully dissipated," said StoneX analyst Rhona O'Connell in a note.

Silver fell 2.6% to $23.52 an ounce, platinum dipped 1.5% to $932.15, while palladium rose 0.4% to $2,335.95.

(Reporting by Shreyansi Singh and Sumita Layek in Bengaluru)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

also read

France, Germany to agree to NATO role against Islamic State - sources
| Reuters
World

France, Germany to agree to NATO role against Islamic State - sources | Reuters

By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States

China's Xi says navy should become world class
| Reuters
World

China's Xi says navy should become world class | Reuters

BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.