(Bloomberg) -- Gold fell to a one-week low as investors tracked the deployment of the first Covid-19 vaccines in the U.S. and the continuation of talks on a stimulus bill.
Lawmakers are closing in on a final agreement for the spending bill needed to fund the government past Dec. 18, and the accord may include a virus- relief package. The omnibus federal funding bill is targeted for release as soon as Tuesday. The first Covid-19 shots were administered by U.S. hospitals Monday.
Gold is weighed down by “this wave of vaccine news across the western countries as they start to roll it out,” Ed Meir, an analyst at ED&F Man Capital Markets, said in a telephone interview. “But I read how complicated this distribution process is going to be. So I don’t know if the euphoria is getting a little ahead of itself.”
The metal is heading for the first quarterly loss since 2018 as progress on vaccines and signs of recovery dent demand for a haven, even as leading central banks continue to offer support for economies. This week, investors will keep a close watch on the Federal Reserve’s final meeting of the year, with markets widely expecting fresh guidance on its asset-purchase program.
Spot gold fell 0.7% to $1,826.43 an ounce at 3:17 p.m. in New York after touching $1,818.90, the lowest since Dec. 2. Futures for February delivery on the Comex fell 0.6% to settle at $1,832.10
Spot silver, platinum and palladium dropped, and the Bloomberg Dollar Spot Index declined 0.2%.
The European Union’s chief negotiator, Michel Barnier, told a private meeting of ambassadors that a trade deal with the U.K. may be completed as soon as this week.
“With Brexit in the picture, we can’t know whether or to what extent individual EU governments will be able to provide fiscal stimulus,” said Rhona O’Connell, head of market analysis for EMEA and Asia at StoneX Group Inc. “In principle, that’s bearish for the euro and, all other things being equal, dollar-positive and mildly bearish for gold.”
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