Gold headed for the largest downturn in seven years as risk appetite gained after a proposed US tax cut and a rise in bond yields.
Stocks climbed after US President Donald Trump said he’s considering a tax cut on capital gains. That’s reduced demand for gold as a haven, helping notch a third day of declines for the metal. Bullion plunged further below $2,000 an ounce, retreating from last week’s record high, as a slump in US real yields eased. The metal has still gained 28% so far this year, smashing through all-time records.
“It’s quite abrupt and brutal, but the price increase before was even more abrupt and brutal,” Carsten Fritsch, a commodity analyst at Commerzbank AG, said by phone.
“The trigger could be the sharp rise in bond yields, which caused some profit-taking and then that cascaded. When people start to take profits, more will follow, and so we see this acceleration of price declines today.” Exchange-traded fund investors also took a breather, seeing back-to-back outflows for the first since June.
On Friday, State Street Corp’s SPDR Gold Shares, the largest gold-backed ETF, saw its biggest outflow since March. Meanwhile, a Bloomberg Intelligence gauge of senior gold miners dropped the most intraday since March, down as much as 5.7%.
Adding to positive market sentiment is a Covid-19 vaccine that Russian President Vladimir Putin said the country has cleared for use, and it hopes to begin mass inoculation soon. Globally, coronavirus infections breached 20mn cases, after doubling in six weeks. It took six months to reach 10mn.
In the US, which accounts for a quarter of all cases, virus hospitalisations fell in hardest hit states, including New York, California and Texas.
Spot gold fell 3.9% to $1,949.03 an ounce in New York. A close at that price would mark the biggest drop since June 2013. Futures for December delivery slid 3.9% to $1,959.70 on the Comex in New York.
LEAVE A COMMENT Your email address will not be published. Required fields are marked*
QFC focuses on business opportunities for Turkish companies
Come harsh winter, median airlines may run out of cash
Airbus unveils 3 concepts for ‘zero-emission’ commercial planes
Libya to restart oil exports at 3rd port as civil war abates
Asian markets mixed as virus worries temper Wall St lead
Tesla’s Elon Musk promises dramatic cuts in e-car costs
Airlines prepare for pre-flight testing to restart aviation
Al-Kaabi highlights optimal use, rationalisation of water resources at RCUWM Governing Board meeting
‘SMEs’ commitment to the climate initiative enhances their competitiveness’, says Sheikh Khalifa