Image used for illustrative purposes Image Credit: Reuters

Gold dropped to the lowest level in four months amid optimism over Covid-19 vaccine developments and the triggering of a formal transition process to President-elect Joe Biden.

The General Services Administration acknowledged Biden as the apparent winner of the presidential election on Monday, following weeks of inaction, and President Donald Trump called on his agencies and departments to cooperate. Biden plans to nominate former Federal Reserve Chair Janet Yellen to serve as his Treasury secretary, people familiar with the matter said.

After rallying to a record in August, bullion prices are taking a hit amid vaccine progress and the recent outflow from gold-backed exchange-traded funds. The Covid-19 shot developed by the University of Oxford and AstraZeneca Plc prevented a majority of people from getting the disease in a large trial, another promising development in the quest to end the pandemic, and the rollout could begin next month.

"After the AstraZeneca-Oxford vaccine news had been released, many investors sold gold and moved on to more risky assets," said Brian Lan, managing director of Singapore-based dealer GoldSilver Central Pte. "We are still bullish in the longer term as the interest rate conditions" and the time it takes for vaccines to be rolled out will support gold, he said.

Prices at current levels are expected to attract investors, as well as wholesalers to cover their shorts or buy inventory for the end-of-year wedding period and to stock up for Lunar New Year, he added.

Spot gold declined as much as 0.9% to $1,821.37 an ounce, the lowest level since July, and traded at $1,825.82 at 11:55 a.m. in Singapore. Silver dropped 0.8%, platinum rose 0.6% and palladium fell 0.6%. The Bloomberg Dollar Spot Index retreated 0.1%.