Gold & Silver

Gold steadies after selloff as investors weigh virus risks

Reuters August 10 | Updated on August 10, 2021

Spot gold, gold futures showed minimal changes

Gold steadied on Tuesday, after three sessions of declines, as uncertainties from rising Covid-19 infections countered a buoyant dollar and bets for early tapering of the US Federal Reserve's economic support.

Spot gold was little changed at USD 1,729.80 per ounce by 11:04 GMT, while US gold futures rose 0.3 per cent to USD 1,731.80.

Coronavirus cases in several Asian countries and the United States continued to surge, threatening the economic outlook and pushing some investors to seek safety in gold.

There are enough uncertainties in the market to support gold as part of a diversified portfolio, but "potential buyers are sitting on the fence concerned about the possibility of tapering to start early," Saxo Bank analyst Ole Hansen said.

"Physical demand out of Asia was also receiving a bit of a knock back due to the increase in coronavirus cases. So a combination of several things just keeps the market on the defensive for now," Hansen said, adding gold needed to break above USD 1,750 and USD 1,760 for a move higher.

Bullion hit its lowest in more than four months on Monday, falling over 4 per cent as robust US jobs figures bolstered expectations that the Fed may exit from the pandemic-era stimulus earlier than previously assumed.

A US interest rate increase could reduce the appeal of holding non-yielding gold.

Investors are looking to US consumer inflation data "against a backdrop of concern that the recent rise in inflationary pressures may well be more persistent, than transitory," CMC Markets UK's chief market analyst Michael Hewson said.

The dollar index also held steady after solid gains in the last two sessions.

Silver was down 0.4 per cent at USD 23.34 per ounce, after falling to an eight-month low on Monday. Platinum rose 0.4 per cent to USD 983.85, and palladium edged 0.1 per cent higher to USD 2,603.40.

Published on August 10, 2021

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