Late on Monday, gold futures on MCX (Multi Commodity Exchange of India) fell by as much as Rs 2,566 per 10 grams, a significant 5 percent slump, to Rs 49,602, within minutes of the news that late-stage COVID-19 vaccine trials of Pfizer were successful.
In the evening (IST) Pfizer Inc said its experimental COVID-19 vaccine was more than 90 percent effective in Phase 3 trials. Pfizer and German partner BioNTech SE said they expect to seek US emergency use authorization later this month.
"The first set of results from our Phase 3 Covid-19 vaccine trial provides the initial evidence of our vaccine's ability to prevent Covid-19," Pfizer Chairman and CEO Albert Bourla said in a statement.
After the statement, investors dumped the safe-haven bullion to bet on riskier assets instead, causing gold prices in the international market to slump 4 percent.
Spot gold was down 4.2 percent to $1,870.51 per ounce, which is a sharp contrast from its near two-month peak of $1,965.33 that it hit in the morning session on the back of a weaker dollar and hopes of additional US stimulus on Joe Biden's win in the presidential election.
On the other hand, stock markets that were open when the statement was made showed a sharp surge hoping that it is the beginning of the end of COVID-19 struggle.
In the US, the Dow Jones Industrial Average index traded 1,100 points or 3.9 percent higher to hit an all-time high. At its session high, the 30-stock average was up nearly 5.7 percent, or more than 1,600 points. The S&P 500 also reached a record, up 2.8 percent
European stocks also closed sharply higher on Monday on Joe Biden's projected election win and positive vaccine news.
The Indian markets were closed when the statement was made, however, both Sensex and Nifty 50 hit new all-time highs of 42,645.33 and 12,474.05, respectively, during the day.
Gold, which is considered as a hedge against currency debasement and inflation, has climbed 24 percent this year and also hit a new all-time high in the Indian as well as international markets, mainly driven by uncertainty around the end of global COVID-19. Investors have been long waiting for good news on a vaccine for the coronavirus pandemic to aid fast recovery in the world's economy.