With Monday’s COVID-19 vaccine rollout leading to the rise of riskier stocks, gold prices have suffered a minor decline, with spot gold falling by 0.4% to $1,831.75 per ounce. U.S. gold futures declined by 0.4% as well to a price of $1,836.80.
While news that a $908 billion U.S. COVID-19 relief plan could be introduced as early as Monday limited gold’s losses, it did little to soften the blow caused by the wave of hype surrounding the latest COVID-19 news.
According to Howie Lee, an economist at OCBC Bank, this fall could cease at the start of 2021, when gold begins to rally again as vaccine optimism gradually fades and investors’ focus shifts back to rising inflation expectations. This would be caused by the enormous monetary and fiscal stimulus that is still required by the U.S. economy to embark on its path to recovery.
The U.S. Federal Reserve is expected to engage in a two-day policy meeting starting on Tuesday, drawing the attention of investors at large. According to OANDA analyst Craig Erlam, gold may still rise even if a fiscal stimulus package is not confirmed.
