Gold slumped 2 percent, breaking below the key $1,800 support level to a near five-month trough on Friday, as growing optimism about a quick vaccine-fuelled economic recovery and a smooth White House transition powered US equities to records.
Spot gold slid 1.3 percent to $1,787.46 per ounce earlier falling to its lowest since July 6 at $1,773.10 an ounce.
The metal has shed about 4.5 percent so far this week, the most since the week of Sept. 25.
US gold futures settled down 1.3 percent at $1,781.90 per ounce.
“As soon as prices touched below the key $1,800 level, it triggered a sell-off. It is probable that prices might test the $1,750 level given we have a strong fundamental reason like the vaccine,” said OANDA analyst Craig Erlam.
Further weighing on gold, US equities raced to a record on the vaccine optimism and as investors bet on calmer global trade under a Joe Biden administration in the United States.
“It is believed that Biden will take a calmer approach towards trade with other countries like China and that is getting reflected in the stock market,” said Natixis analyst Bernard Dahdah.
