Gold futures settled lower on Monday as riskier assets such as equities moved up, reacting to news about a massive U.S. stimulus and developments on the coronavirus vaccine front.
Reports about a post-Brexit trade deal between the European Union and Britain, and the dollar’s recovery from lower levels contributed as well to gold’s decline.
On Sunday, U.S. President Donald Trump signed legislation for $900 billion in coronavirus economic aid and $1.4 trillion in government spending, providing support for millions of Americans and averting a government shutdown. He had earlier threatened to block the package.
“I am signing this bill to restore unemployment benefits, stop evictions, provide rental assistance, add money for PPP, return our airline workers back to work, add substantially more money for vaccine distribution, and much more,” Trump said in a statement.
The dollar index, which slid to 89.98 in the Asian session, rallied to 90.28 around early afternoon, gaining marginally over its previoius close.
Gold prices initially reacted positively to news about signing of the relief package by Trump. However, prices came off higher levels as stock markets in Asia and Europe gained in strength.
Gold futures for February ended down $2.80 or about 0.1% at $1,880.40 an ounce.
Silver futures for March closed higher by $0.631 at $26.539 an ounce, while Copper futures for March settled at $3.5710 per pound, gaining $0.0085 for the session.
In Brexit news, the EU and UK announced a post-Brexit trade deal on Saturday and the 27 ambassadors from EU member nations formally approved the deal on Monday. However, the agreement still needs to be approved by U.K. lawmakers before the Dec. 31 deadline.
On the vaccine front, the European Union has launched a massive coronavirus vaccine drive. France kickstarted virus vaccination programme on Sunday after the French High Authority for Health or HAS authorized the use of Pfizer/BioNTech COVID-19 vaccine.
Meanwhile, according to reports, the coronavirus vaccine developed by AstraZeneca is likely to get approval from UK authorities by Tuesday.
The material has been provided by InstaForex Company – www.instaforex.com