The gold ended the month with a 6% drop, its lowest settlement since 2016.
The risk-on sentiment in the market reverted attention away from safe-haven assets and into riskier bets as investors foresee a back-to-normal way of life.
The yellow metal settled just above the $1,700 threshold. This is a significant drop from its steady settlement at $1,900 per ounce earlier in the month.
For the record, the bullion notched a record-high of $2,090 per ounce in August.
During that time, a growing number of cases worldwide combined with the dimmed prospect for an effective inoculation, provided a boost for the precious metal.
This was initially expected for a further run towards the $2,300 mark. Some investment banks went as far as $3,000 per ounce before the end of the year.
This projection came in the middle of the stimulus package bonanza and the weakening greenback.
However, it failed to deliver to expectations due to the downward pressure coming from the successive reports from pharmaceutical companies.
Gold futures for December delivery settled at $1,780.90 per ounce, shedding off $7.20 or 0.4% in New York’s Comex.
At one point in the trading session, it sank to an intraday bottom of $1,745.50 and hit $1,767.60, which is the lowest since mid-June, at one point of the trading session.
Compared to its record-high figure three months ago, the bullion slashed as much as 15% or $300. This implies investors’ eroding confidence in the non-yielding commodity.
In the latest vaccine developments, Moderna is the latest biotechnology company to seek emergency use approval from the US Food and Drug Administration.
Similarly, Pfizer announced last Friday the first mass shipment of its Covid-19 vaccines via United Airlines.
Prospects for Gold Price
As asserted by some experts in the field, the bullion could fall further below the $1,700 per ounce support level.
The current critical threshold stands at $1,748. Some analysts noted that if the precious metal fails to maintain such a figure, then the risk of falling towards $1,688 and $1,660 is high.
Investors need not worry as this could provide another bullish run and a healthy price consolidation for the hard commodity.
Currently, the metal’s patrons are looking for support from the stimulus package announcement from the European Central Bank and the Federal Reserve.
Recently, the ECB announced that the bloc needs a sustained fiscal stimulus to keep its economy afloat.
In the latest metal commodity charts, the spot gold trades in a conservative contango at $1780.85 per ounce.
- Trading Instrument