On Friday, the precious safe-haven gold futures’ prices were hit with a hefty whiplash of 2 per cent, diving below a critical support level of $1,800 an ounce with further downside momentum on the cards as a growing optimism of a pandemic vaccine rollout as early as by mid-December this year alongside prospects of a smooth transition of power in the Oval Office had fuelled up investors’ appetite for riskier assets, leading to a mass-scale sell-off wave of the precious yellow metal.
Apart from vaccine optimisms, hopes of a quicker-than-anticipated economic recovery following reveal of an upbeat China data alongside a robust uptick in IHS Markit’s survey data of US Composite PMI (Purchasing Managers’ Index) released earlier this week, a global equity market hovering near all-time highs had weighed heavily on gold futures’ prices as investors seemed to be ditching out the safe-haven metal in a bid to jump on to the bandwagon of a robust rally in a gauge of global equity indices.
Gold reports worst weekly plunge since end-September
Citing statistics, as the gold futures’ prices had reported their worst percentage decline since September, spot gold soured 1.3 per cent to wrap up Friday’s commodity market at $1,787.46 an ounce, breaking below its key support level of $1,800, after having been plunged to a session-low of $1,773.10 an ounce, its lowest level since July 6, while the US gold futures’ prices had faltered 1.3 per cent to $1,781.90 an ounce.
On the week, the precious safe-haven metal was muzzled by 4.5 per cent, remarking its worst weekly percentage decline since September 25. Meanwhile, citing investors’ hope of a smooth transition of power in the White House alongside a likely calmer approach on trade of Biden Administration, a Natixis analyst Bernard Dahdah said, “It is believed that Biden will take a calmer approach towards trade with other countries like China and that is getting reflected in the stock market.
However, with ultra-low interest rates and prospects of more stimulus in the economy, gold looks robust in the longer term. ”