Gold is on pace for its biggest slide in 7 years as investors rush back to stocks and Treasurys
- Spot gold is set to post its biggest one-day crash since 2013 as investors dump the precious metal for risk assets.
- Gold tumbled as much as 4.7%, to $1,932.28, on Tuesday. Futures for December delivery slid 3.9%, to $1,946, at intraday lows.
- Stocks gained as investors rested optimism on falling US COVID-19 hospitalizations and stimulus talks. Treasury yields also jumped, further hitting gold's relative value.
- Many gold traders were "looking for an excuse to lock-in profits" and found a reason to sell in Russia's coronavirus vaccine approval, Edward Moya, a senior market analyst at Oanda, said in a note.
- Watch gold trade live here.
Spot gold is on track for its biggest single-day decline since 2013 as investors divert cash to risk assets.
Prices sank as much as 4.7%, to $1,932.28 per ounce, on Tuesday. Gold futures for December delivery tumbled 3.9%, to $1,946 per ounce, at intraday lows.
The precious metal is hot off a multiweek rally that saw prices soar above $2,000 per ounce to record highs. But risk appetites rebounded on Tuesday as US COVID-19 hospitalizations dropped and investors maintained hopes of another round of fiscal stimulus. Traders also cheered President Donald Trump's Monday announcement that he was "seriously" considering a capital-gains tax.
Stocks jumped at the open on the collection of bullish drivers. Treasury yields gained ahead of a record US debt offering. Treasury-market weakness typically boosts the value of nonyielding assets like gold.
Those who rode gold to new highs in recent weeks were "looking for an excuse to lock-in profits," Edward Moya, a senior market analyst at Oanda, said in a note. One such reason emerged early on Tuesday when Russian President Vladimir Putin announced that the country had approved a coronavirus vaccine.
The news boosted stock futures before markets opened, but global experts largely took the announcement with a grain of salt. Russia approved the vaccine before beginning late-stage trials, a step that most authorities deem necessary to warrant approval.
Still, many gold traders "jumped all over Russia's vaccine news" and prompted widespread selling, Moya said.
"It didn't matter that this was somewhat telegraphed or that the Russians have only begun the Phase 3 trials," the analyst said, adding that gold "was ready for a selloff."
Spot gold traded at $1,935.96 as of 1:15 p.m. ET.
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