Gold prices fell on Monday on overall optimism over this week’s coronavirus vaccine rollout in Britain and as the dollar bounced off a multi-year low.
Spot gold prices were 0.3% lower at $1,832.30 per ounce by 1027 GMT, while U.S. gold futures were down 0.2% at $1,836.10.
“The European session is focused on the Brexit negotiations, which are apparently not running as smoothly as expected, and that’s why we’re seeing gold coming down as the dollar strengthened against the euro,” said Saxo Bank analyst Ole Hansen.
A Brexit deal hung in the balance as Britain and the European Union made a last-ditch attempt to strike a trade deal that would avoid a disorderly exit in just 24 days.
The dollar index bounced off near 2-1/2-year lows, making gold expensive for holders of other currencies.
Also, Britain was set to become the first country to roll out the Pfizer/BioNTech COVID-19 vaccine this week.
“The next few trading sessions will tell us how strong the resistance area of $1,850 is, which is the first clear barrier for further recoveries for the yellow metal,” ActivTrades’ chief analyst Carlo Alberto De Casa said in a note.
Gold is still up by around a fifth so far this year, benefitting from being considered a hedge against inflation that could result from the large stimulus measures unleashed in 2020.
“The (U.S.) jobs report on Friday wasn’t that strong either, so if we do get a breakthrough in the stimulus talk in the U.S., then that potentially could jolt gold prices through that resistance level,” Saxo Bank’s Ole said.
Data on Friday showed the U.S. economy added the fewest jobs in six months in November, after which President-elect Joe Biden highlighted the need for a coronavirus relief bill.
Silver fell 1.4% to $23.82 per ounce and platinum dropped 2.8% to $1,024.83, while palladium was down 0.9% at $2,322.30.
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