By Barani Krishnan
Investing.com - Gold clawed back some losses after Monday’s epic shakedown, as tamped down mood for risk on Wall Street helped the yellow metal find shelter at under $1,900 an ounce.
New York-traded gold for December delivery settled up $22, or 1.2%, at $1,876.40 an ounce.
A day earlier, the benchmark gold futures contract suffered its biggest meltdown since early August, falling more than $100 at one point and hitting a near four-month low of $1,848, before settling down $88, or 4.5%.
The selloff came after Pfizer (NYSE:PFE) announced substantial progress in its Covid-19 vaccine program, surprising markets and redirecting money from havens into risk assets.
Spot gold, which reflects real-time trades in bullion, was up $14.72, or 0.8%, to $1,877.15 by 2:50 PM ET (19:50 GMT).
“Gold is enjoying mild relief today but remains not far from the bottom of its three month lows,” said Craig Erlam, analyst at OANDA in New York.
Gold chartist Eren Sengezer concurred in a blog posted on FX Street. “Only a decisive break above $1,900 could attract more buyers and help XAU/USD shake off the bearish pressure,” he said, using the trading symbol for bullion and its counter-trade, the dollar.
Erlam said gold could remain on a bullish path if the Federal Reserve and European Central Bank continue making funds available to markets, and governments are forced into loosening their purse strings further. “This could pressure the dollar in 2021 and be another supportive factor for gold,” he said.
In the United States, particularly, President-Elect Joe Biden and his Democratic government-in-transition is trying to find passage for a Covid-19 fiscal stimulus, as the coronavirus continues to set record highs for infections. They are likely to face intense pushback from rival Republicans in the Senate and incumbent President Donald Trump, who has refused to concede his loss in last week’s election.