Gold prices were yesterday set for a third straight week of declines as growing optimism over a coronavirus vaccine drove investors into traditionally riskier assets and out of the safe-haven metal.
Spot gold fell 0.2 per cent to US$1,807.86 per ounce in early trading yesterday.
US gold futures were steady at US$1,806. Bullion was set to fall 3.3 per cent on the week.
Asian shares stalled near record highs yesterday as AstraZeneca faces tricky questions about the success rate of its vaccine candidate that could hinder its chances of getting speedy United States and European Union regulatory approval.
"For the markets, I don't think that (doubts over the effectiveness of a vaccine) changes the perception there's going to be a vaccine coming sooner than previously expected," said IG Markets analyst Kyle Rodda.
Investors are starting to buy into the narrative that the economic recovery is going to gather steam next year and that is driving investors to liquidate gold holdings, he added.
On the technical front, support for gold remains intact at US$1,800 an ounce, while silver continues to see supportive interest near the psychological US$23 level, MKS PAMP said in a note.
Raising the prospect for further stimulus, the European Central Bank's chief economist warned that tolerating "a longer phase of even lower inflation" would hurt consumption and investment.
Gold has gained 19.2 per cent this year, driven by large stimulus measures that raised concerns of inflation, against which the metal is considered a hedge.
"With real interest rates remaining considerably low, the dollar structurally weak, and with the upcoming selection of (Janet) Yellen as the next US Treasury Secretary, the longer-term appeal of gold as safe haven would remain good," Phillip Futures senior commodities manager Avtar Sandu said.
Silver fell 1 per cent to US$23.21 per ounce. Platinum dropped 0.7 per cent to US$954.93 and palladium was 0.5 per cent higher at US$2,394.02.
Meanwhile, bitcoin and other digital peers steadied after posting some of the biggest declines since the onset of the pandemic.
A day after tumbling 9.7 per cent, bitcoin edged higher to US$17,050 at 9.05 am in London. Ethereum was steady at US$514.50, while XRP rose 3 per cent to 53.65 US cents.
Fears over tighter cryptocurrency regulations and profit-taking after a frenetic rally were among the reasons cited for Thursday's sell-off.
"After big rallies in shares and various other assets, they are all vulnerable to a bit of a pause," said head of investment strategy Shane Oliver of AMP Capital Investors in Sydney.