NEW YORK: Gold fell more than 2% to its lowest level in four-months on Monday as better-than-expected US business activity data and promising Covid-19 vaccine trials boosted hopes for a swifter economic recovery. Spot gold dipped 1.7% to $1,838.25 per ounce by 12:38 p.m. EST (1738 GMT), after falling to its lowest since July 21 at $1,830.19. US gold futures shed 1.9% to $1,836.00.

"Gold broke below the key $1,850 level after an unbelievably strong US PMI release just dampened the need for stimulus. No one was expecting such strong readings in both services and manufacturing," said Edward Moya, senior market analyst at OANDA.

Data on Monday showed US business activity in November expanded at its fastest rate in more than five years, boosting optimism about the health of the US economy among investors. The upbeat data came after Britain's AstraZeneca said its vaccine could be around 90% effective without any serious side effects.

"Investors are rotating back to stocks because of the fact that there is little less uncertainty now than there was," said Jeffrey Sica, founder of Circle Squared Alternative Investments.

"The data that came out today makes it more likely that we will see a recovery (sooner) than originally anticipated."

Further denting bullion's appeal, the dollar rose against rivals. Gold, considered a hedge against inflation and currency debasement, has risen more than 21% this year, benefiting from its attractions as a safe haven.

"While we do expect gold to go onto the defensive when the global economies start to show sustainable recoveries, the tailwinds behind the market have not yet been fully dissipated," said StoneX analyst Rhona O'Connell in a note. Elsewhere, silver fell 2.5% to $23.54 an ounce, platinum dipped 2.4% to $923.07, while palladium rose 1.1% to $2,351.06.