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PRECIOUS-Gold edges up on Delta virus threat; firm dollar caps gains

Category: Economy

Date: 2021-07-19T07:02:17+0000
PRECIOUS-Gold edges up on Delta virus threat; firm dollar caps gains

Shafaq News/ Gold prices edged higher on Monday, lifted by a retreat in U.S. Treasury yields and concerns that a surge in coronavirus cases could dampen global economic recovery, though an uptick in the dollar limited the safe-haven metal’s appeal.

Spot gold was up 0.1% at $1,812.06 per ounce, as of 0502 GMT, after falling 1% in the previous session.

U.S. gold futures were steady at $1,815.10.

“Covid-driven risk aversion is driving Asian markets today after a weak finish on Wall Street on Friday,” said Jeffrey Halley, a senior market analyst at OANDA.

Gold is used as a safe investment during times of political and financial uncertainty.

“Some short-covering is providing modest support to gold, but it not displaying any clear momentum in either direction.”

Sentiment in wider financial markets remained weak as investor risk appetite was soured by growing inflationary pressures and a relentless surge in coronavirus cases.

Many countries, particularly in Asia, are struggling to curb the highly contagious Delta variant of the coronavirus and have been forced into taking lockdown measures.

Benchmark 10-year Treasury yields held near more than one-week low, reducing the opportunity cost of holding non-interest bearing gold.

However, safe-haven gains for the U.S. dollar limited gold’s appeal, as the dollar index strengthened 0.1% and edged towards a three-month high against its rivals.

“Negative real yields appear to be driving gold prices in the face of a stronger USD. We expect the U.S. dollar to weaken as other central banks hike rates,” ANZ analysts said in a note.

On the technical front, spot gold may break a support at $1,813 per ounce and fall towards $1,789, following its failure to break a resistance at $1,833, according to Reuters technical analyst Wang Tao.

Elsewhere, silver fell 0.7% to $25.49 per ounce, palladium rose 0.4% to $2,641.68, and platinum eased 0.1% to $1,101.15.

Source: Reuters

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