Gold above one-week low as safe-haven demand flows in

Gold prices edged higher on Tuesday as concerns over the economic damage from surging cases of the Delta coronavirus variant, and a dip in US Treasury yields, pushed the metal above a one week low hit in the last session.

Spot gold was up 0.3% at $1,818.43 per ounce by 1024 GMT, having hit a low of $1,794.06 in the previous session. US gold futures gained 0.5% to $1,817.30.

"The great problem currently is the fear about the economic impacts of the Delta variant of the coronavirus. And after Japan took severe measures concerning the Olympic Games, markets got more and more nervous ... (resulting) in a flight into the safe havens," said Quantitative Commodity Research analyst Peter Fertig.

Spot gold may fall towards $1,789

A surge in coronavirus cases across the United States and other countries has sent higher-risk assets tumbling.

Tokyo Olympics organisers on Sunday reported the first COVID-19 cases among competitors in the athletes' village.

Gold, seen as a safe store of value, tends to benefit during times of political and financial uncertainty.

"Rapidly rising cases in Europe as well as in the United States prompted market participants to reduce risks in their portfolios," said Julius Baer analyst Carsten Menke.

Benchmark 10-year Treasury yields touched a more than five-month low, reducing the opportunity cost of holding non-interest bearing gold.

A firm US dollar also challenged gold's appeal, as the currency held firm near 3-1/2-month highs. A stronger dollar makes gold more expensive for other currency holders.

"If the US dollar is strengthening because the yields are falling due to flight into the safe haven then the impact (on gold) ... could be only slightly positive or even negative, as we have seen," Fertig added.

Elsewhere, platinum rose 0.2% to $1,077.42 per ounce, palladium gained 0.9% to $2,617.98, and silver eased 0.1% to $25.18.