LONDON/ AMSTERDAM: Gold climbed higher on Monday as the dollar pulled back, while lingering fears of possible roadblocks to global economic growth from rising Delta coronavirus cases worldwide also supported prices.
Spot gold was up 0.5% at $1,789.20 per ounce by 1058 GMT, while US gold futures gained 0.4% to $1,791.10.
“The dollar is trading a tad softer, offsetting an uptick in yields and helping gold prices,” Saxo Bank analyst Ole Hansen said.
“In the short term, we’re not expecting much movement as we await Jackson Hole to get an indication whether the Federal Reserve is heading towards taper, or if the latest virus outbreak has put a brake on those expectations.”
Making gold less expensive for other currency holders, the dollar index fell 0.3%, moving away from last week’s 9-1/2-month high.
Recent data from the United Kingdom and Japan outlined the Delta variant’s economic impact, with soaring infections having hammered equity markets last week, boosting the allure of safe-haven assets.
A spike in COVID-19 cases also prompted the Fed to schedule its annual symposium in Jackson Hole, Wyoming on Aug. 27 virtually, with all eyes on Chairman Jerome Powell’s speech on the economic outlook and any hints on the tapering timeline.
Dallas Fed President Robert Kaplan, a strong supporter for tapering, said on Friday he might need to adjust that view if the Delta variant materially slows economic growth.
Analysts at Goldman Sachs said in a note gold would continue to trade “moderately higher” on a weaker dollar and demand recovery in emerging markets.
“For gold to move materially higher though, there has to be a general risk-off event which will trigger demand for defensive inflation hedges such as the return of inflation worries,” they said.
Silver rose 1.7% to $23.40, while platinum climbed 2.6% to $1,021.48.
Palladium gained 2.5% to $2,331.79, bouncing off a more than five-month low hit earlier in the day.
Comments
Comments are closed.