2020.12.0918:32:00UTC+00Gold Futures Settle Sharply Lower

Gold prices declined sharply on Wednesday as optimism about U.S. fiscal stimulus and positive updates on the coronavirus vaccine front took some sheen off the yellow metal.

The dollar's recovery too contributed to gold's decline. The dollar index rose to 91.20, gaining about 0.25%, rebounding from recent weakness.

Gold futures for February ended down $36.40 or about 1.9%, at $1,838.50 an ounce, settling lower after two successive days of gains.

Silver futures for March ended lower by $0.746 at $23.990 an ounce, while Copper futures for March settled at $3.5135 per pound, gaining $0.0145.

Gold's appeal faded a bit following the White House unveiling a $916 billion Covid-19 relief bill in a final dash to break a months-long logjam over new aid for the coronavirus-stricken U.S. economy.

In a statement on Twitter, Treasury Secretary Steven Mnuchin said he had talked the plan over with Republican leaders as well as Trump and the new proposal includes "money for state and local governments and robust liability protections for businesses, schools and universities."

Traders were also looking ahead to the European Central Bank's monetary policy meeting, scheduled to take place on Thursday. The ECB is widely expected to increase and extend the pandemic emergency purchase program.

On the vaccine front, Britain on Tuesday became the first Western nation to begin a wide vaccination campaign, while Johnson & Johnson said it expects to have results from its final trial for its single-dose coronavirus vaccine in January.