Gold Up, With COVID-19 Cases Surge Dimming Vaccine Optimism

By Gina Lee

Investing.com – Gold was up on Tuesday morning in Asia, with COVID-19 cases continuing to increase and overshadowing the start of COVID-19 vaccine inoculations in the U.S and Canada. Negotiations over the latest U.S. stimulus measures continue.

Gold futures were up 0.32% at $1,837.90 by 12:10 AM ET (4:10 AM GMT). Holdings in the SPDR Gold Trust (P:GLD) fell 0.4% to 1,171.32 tons on Monday.

A New York City intensive care unit nurse became the first American to be inoculated with BNT162b2, the COVID-19 vaccine co-developed by Pfizer Inc (NYSE:PFE) and BioNTech SE (F:22UAy), after deliveries started on Monday. The U.S. Food and Drug Administration (FDA) granted emergency use authorization for BNT162b2 on Dec 11.

Canada also began inoculating frontline healthcare workers and elderly nursing home residents after approving the vaccine. Singapore's Health Sciences Authority also gave its nod to BNT162b2 on Monday, the first Asian country to do so, with the first shipments due in the city by the end of December according to Prime Minister Lee Hsien Loong.

However, increasing COVID-19 cases globally have prompted some countries to tighten restrictive measures. New York City could see its second full shutdown, and other parts of the U.S. could also see tightened restrictions. European governments are also tightening measures, with London possibly seeing England’s toughest COVID-19 rules from Wednesday onwards. The Netherlands and Germany are also among the European countries tightening restrictions.

Negotiations over the latest stimulus measures continues, with both Republicans and Democrats working to reach a consensus on a $908 billion bipartisan proposal. Although hopes are rising on both sides that the bill could be passed, a $1.4 trillion spending bill for the fiscal year beginning on Oct. 1 must be passed by Friday to avoid a government shutdown must be passed ahead of the measures.

In the U.K., hope that a post-Brexit trade agreement with the European Union can be reached is rising. However, there are still gaps on key issues, a spokesman for Prime Minister Boris Johnson warned on Monday.

The U.S. Federal Reserve kickstarts a full week of central bank policy decisions as it convenes later in the day and on Wednesday. The Bank of England and the Mexican, Swiss and Indonesian central banks will follow on Thursday, with the Bank of Japan and the Bank of Russia rounding the week off on Friday.

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