Gold fell on Thursday, hovering close to a one-week low hit in the last session, with its appeal dented by overall optimism for a vaccine-led economic rebound.
Spot gold slipped 0.3% to $1,833.40 per ounce at 01036 GMT, after falling as much as 2.5% on Wednesday. U.S. gold futures were down 0.1% to $1,837.40.
“Gold is likely to see a bit of retracement as there’s not much safe haven demand in the near term,” said Bank of China International analyst Xiao Fu.
“Nevertheless, there could still be fluctuations in the market as the coronavirus situation in the USA and Europe are still quite severe.”
Global equities were mixed, caught between optimism surrounding the rollout of COVID-19 vaccines in Britain and Canada and worries surrounding surging cases, especially in the United States.
Investors are awaiting further monetary policy decisions from the European Central Bank (ECB).
The ECB is expected to announce new stimulus measures on Thursday at 1245 GMT to prop up a recession-hit European economy. Only the details of the package remain up in the air.
“Practically anything that they do is likely to be positive for gold,” said StoneX analyst Rhona O’Connell.
“(ECB President Christine Lagarde) is bound to keep the policy as accommodative as possible, which means that we’re looking at negative interest rates for quite a long time yet, and she’ll probably be pushing for fiscal stimulus.”
Trading will also be muted by thinning liquidity going into the Christmas holidays, O’Connell said.
Gold is up about 20% this year, benefiting from its appeal as a hedge against inflation that could result from the unprecedented stimulus unleashed in 2020.
Investors also awaited U.S. weekly jobless claims data, due at 1330 GMT.
Among other precious metals, silver fell 0.3% to $23.85 per ounce and platinum rose 0.8% to $1,008.50, while palladium gained 0.9% to $2,285.50.
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