PRECIOUS-Gold slumps over 2% as vaccines spark economic optimism

(Updates prices)
* Silver falls as much as 4%
* Health Canada approves Pfizer and BioNTech's COVID-19
vaccine
* Interactive graphic tracking global spread of coronavirus:
https://tmsnrt.rs/3mvcUoa

By Shreyansi Singh
Dec 9 (Reuters) - Gold retreated more than 2% on Wednesday
as optimism driven by more progress on the COVID-19 vaccine
front bolstered hopes for a smoother economic recovery.
Spot gold XAU= was down 2.4% at $1,827.26 per ounce by
2:01 p.m. EST (1901 GMT). On Tuesday, gold hit its highest since
Nov. 23 at $1,875.07.
U.S. gold futures GCv1 settled down 1.9% at $1,838.50.
"There is the anticipation that some of the chaos that has
resulted from the pandemic is going to subside (now that) they
are beginning to disperse the vaccine in some parts of the
world," said Jeffrey Sica, founder of Circle Squared Alternative
Investments. MKTS/GLOB .N .EU
Canada on Wednesday approved Pfizer and BioNTech's COVID-19
vaccine, a day after Britain became the first Western nation to
start a mass vaccination drive. Gold was also pressured by an uptick in the dollar. USD/
But the metal, considered a hedge against potential
inflation, was still up more than 20% for the year, underpinned
by hopes of more fiscal stimulus.
With the pandemic roaring back to levels surpassing those
seen early in the crisis, lawmakers in the United States made
attempts to hammer out an agreement on a new fiscal support
package.
Liquidation of gold exchange traded funds posed the biggest
threat to gold prices, and central demand has been weaker, HSBC
analyst James Steel said in a note, cutting the bank's 2021
price forecast by 3% to $1,907. But while gold's rally has been blunted by the vaccine news,
bullion remains supported by accommodative monetary and fiscal
policies and geopolitical risks, the bank added. GOL/ETF
Investors are now awaiting on policy cues from the U.S.
Federal Reserve's two-day meeting next week.
A dovish FOMC should "relight the gold rally," said Jeffrey
Halley, a senior market analyst at OANDA.
Silver XAG= slipped 3.8% to $23.64 per ounce, platinum
XPT= fell 2.9% to $993.23 and palladium XPD= was down 1.3%
at $2,280.92.

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