for-phone-onlyfor-tablet-portrait-upfor-tablet-landscape-upfor-desktop-upfor-wide-desktop-up

PRECIOUS-Gold set to extend weekly fall on stimulus doubts, vaccine hopes

    * Gold's move above $2,000 in 2021 still likely- Citi
    * Outflows of about 40 tonnes so far in November from SPDR
ETF
    * Interactive graphic tracking global spread of coronavirus:
tmsnrt.rs/3mvcUoa

 (Adds comments, updates prices)
    By Eileen Soreng
    Nov 20 (Reuters) - Gold was set for a second weekly fall on
Friday as promising COVID-19 vaccine trials and U.S. Treasury
Secretary Steven Mnuchin's call to end the Federal Reserve's key
pandemic lending programmes eroded bullion's safe-haven appeal.
    Spot gold        fell 0.1% to $1,866.19 per ounce by 0832
GMT and was down 1.1% for the week.
    U.S. gold futures        were up 0.2% at $1,865.40.
    In a letter, Mnuchin told Fed Chairman Jerome Powell that
$455 billion allocated to the Treasury under the CARES Act
should be instead available for Congress to reallocate, sparking
uncertainty about stimulus programmes.             
    "If the Fed does start shrinking its assistance programme
that could be a bit of headwind for gold again... The monetary
debasement argument that has supported gold could weaken," said
Lachlan Shaw, National Australia Bank's head of commodity
research.
    Meanwhile, data from AstraZeneca         and Oxford
University showed their potential COVID-19 vaccine produced a
strong immune response in older adults.             
    "Positive COVID-19 vaccine developments should slow but not
end the secular gold bull cycle without a hawkish pivot in U.S.
monetary policy," Citi Research said in a note, adding gold's
move above $2,000 in 2021 is still likely. [nFWN2I51F7
    Indicative of sentiment, holdings in the SPDR Gold Trust
      exchange-traded fund saw net outflows of about 40 tonnes
so far in November.          
    Investors pulled $4 billion from gold, the biggest outflows
ever, amid a rush for riskier assets last week, BofA said on
Friday.             
    Gold, considered a hedge against inflation and currency
debasement, has gained 23% this year, benefiting mainly from
unprecedented stimulus unveiled to cushion the pandemic's
impact.
    "Gold's long-term story still remains uncompromised because
the monetary policy is not going to change anytime soon," said
Kunal Shah, head of research at Nirmal Bang Commodities in
Mumbai, India. 
    Silver        rose 0.3% to $24.17 per ounce. Platinum       
gained 0.6% to $957.00, while palladium        was up 0.3% at
$2,332.50. 
    

 (Reporting by Eileen Soreng in Bengaluru; Editing by
Ramakrishnan M. and Subhranshu Sahu and Elaine Hardcastle)
  

Breakingviews

Reuters Breakingviews is the world's leading source of agenda-setting financial insight. As the Reuters brand for financial commentary, we dissect the big business and economic stories as they break around the world every day. A global team of about 30 correspondents in New York, London, Hong Kong and other major cities provides expert analysis in real time.


Sign up for a free trial of our full service at https://www.breakingviews.com/trial and follow us on Twitter @Breakingviews and at www.breakingviews.com. All opinions expressed are those of the authors.

for-phone-onlyfor-tablet-portrait-upfor-tablet-landscape-upfor-desktop-upfor-wide-desktop-up