By Geoffrey Smith
Investing.com -- Gold prices fell on Monday as risk appetite returned to global markets on the back of positive preliminary test results from an experimental drug designed to fight the Covid-19 virus, while comments from senior U.S. officials over the weekend had mixed effects.
Bullion had started the day by hitting a fresh seven-year high of $1,775.40 a troy ounce after Federal Reserve Chairman Jerome Powell indicated that there was potential still for much more monetary stimulus to support the economy – even though he again dismissed the idea of pushing official interest rates below zero.
However, prices reversed sharply after biotech company Moderna (NASDAQ:MRNA) said its experimental vaccine for treating Covid-19 had succeeded in producing antibodies in all 45 patients in a small sample of its efficiency.
The speed with which a vaccine against the Covid-19 virus can be developed and distributed is the key variable in determining the speed and strength of the global economic recovery. Powell told CBS on Sunday that consumers were unlikely to fully regain the desire to go out and spend until they were confident that the infection risks were contained.
By 11:45 AM ET (1545 GMT), gold futures for delivery on the Comex exchange were down 1.1% at $1,737.30 a troy ounce, while spot gold was down 0.5% at $1,734.38.
Silver futures, however, continued their advance, protected by their exposure to the industrial cycle. They rose as far as $17.98 an ounce – their highest since early March, before retracing to be up 2.9% at $17.40.
Platinum futures likewise rose 6.4% and palladium futures posted their best day in months, rising over 10% to trade over $2,000 for the first time in three weeks.
The platinum group metals were helped by the resumption of production at the big three automakers in Detroit and elsewhere, marking the end of a fallow period in which there had been effectively no industrial demand for the metals.