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Gold prices slipped on Wednesday as global stocks rallied on optimism about the progress in finding a vaccine for the coronavirus.
Better-than-expected quarterly results from U.S. corporations are also helping to diminish the traditional haven appeal for bullion, but a decline in the U.S. dollar limited declines in precious metals.
Bullish commodity investors make the case that gold’s uptrend remains intact but warn that its recent runup above the psychologically important $1,800-an-ounce level may be giving way to a pause.
“Gold is wavering around the $1,800 mark in a manner that could be viewed as both bullish and bearish, depending on how you view it,” wrote Craig Erlam, senior market analyst at Oanda, in a Wednesday note.
“The flip side is that, rather than seeing an explosion of buyers on the back of the breakout, it’s looking a little tired,” he wrote.
Gold for August delivery GC00, -0.21% on Comex shed $3.70, or 0.2%, at $1,809.60 an ounce, after declining less than 0.1% on Tuesday, bouncing off a low that had taken beneath the $1,800 threshold.
A rally in global equities early Wednesday was being buoyed in part by Moderna Inc. MRNA, +4.54%, which said its coronavirus vaccine candidate produced a “robust” immune-system response in a larger group of people and that the study would move to a further clinical trial in July. Markets also reacted positively to a separate report on developments for an Oxford University vaccine candidate backed by AstraZeneca PLC AZN, +4.53% AZN, +1.39%.
In the U.S., Goldman Sachs GS, +2.45% GS, +2.45% on Wednesday delivered results that beat expectations for revenue and earnings, with shares rising more than 4% in premarket action.
The flow of sanguine news for the equities market suggests a quick recovery from the economic damage wrought by the COVID-19 pandemic and has lessened the need for safe haven precious metals. Thus far, gold has been driven to around its highest level since 2011 given the uncertainties about the outlook for businesses across the world.
September silver SIU20, +0.94%, meanwhile, rose 21 cents, or 1.1%, recovering much of its decline from Tuesday.
Arguably limiting the decline for gold is trade in the U.S. dollar, which was off 0.4% at 95.88, according to a gauge of the buck against a half-dozen currencies as measured by the ICE U.S. Dollar index DXY, -0.41%. A softer dollar can make assets priced in the monetary unit more attractive to commodity buyers using other currencies.
Expectations for a longstanding policy of easy-money from global central banks and fiscal stimulus from governments to curtail the harm from the viral outbreak also has served as a buttress for bullion, experts say.
In U.S. economic data, a snapshot of New York state’s manufacturing sector in July is due at 8:30 a.m. Eastern Time, along with June import price numbers. Industrial production data for last month is due at 9:15 a.m., followed by the Federal Reserve’s Beige Book at 2 p.m.
