AMSTERDAM/ LONDON: Gold prices fell back from a one-week peak hit on Monday as the dollar ticked higher, although receding worries about early tapering by the US Federal Reserve and concerns over the coronavirus Delta variant underpinned the metal.
Spot gold was down 0.3% at $1,774.20 per ounce by 1210 GMT. US gold futures fell 0.3% to $1,773.50.
The US dollar rose 0.1% against major peers, buoyed by disappointing monthly activity data from China.
“We’re just seeing a small reversal in gold prices after a strong rally on Friday, which is probably quite natural, also considering the fact that the dollar is a bit stronger,” Saxo Bank analyst Ole Hansen said.
“The market may have started to readjust after weak sentiment data going into the Fed minutes and Jackson Hole. But right now, we’re in a period of consolidation between $1,750 support to the downside and $1,790 being the upside.”
Gold jumped 1.5% on Friday after data showed US consumer sentiment dropped sharply in early August to its lowest in a decade, soothing fears among investors that the Fed has been getting closer to a decision about when to reduce its stimulus.
The focus now shifts to minutes of the Fed’s July meeting due to be released on Wednesday and Chair Jerome Powell’s comments on Tuesday that could shed more light on US monetary policy.
Markets are also keeping a close watch on geopolitical implications due to a sudden collapse of the Afghan government after Taliban insurgents seized the capital Kabul.
“Over the weekend, the political situation in Afghanistan deteriorated drastically ... this might potentially affect the financial markets and the gold price, which we will find out over the next few days,” said Carlo Alberto De Casa, market analyst at Kinesis.
Gold is often used as a safe store of value during political and financial uncertainty.
Silver fell 1.1% to $23.49 per ounce. Platinum slipped 1.4% to $1,012.56 and palladium dropped 0.6% to $2,636.18.
Comments
Comments are closed for this article.