Rampage of Covid-19 Delta variant pushes gold prices higher
Investors are now awaiting the US nonfarm payrolls report on Friday for clues on the Fed’s next step
Bengaluru — Gold rose on Thursday as concerns over the more infectious Delta variant of Covid-19 boosted its safe-haven appeal, ahead of US jobs data seen as crucial to the US Federal Reserve’s policy outlook.
Spot gold was up 0.3% at $1,775.52/oz as of 3.28am GMT, moving further away from an over two-month low hit on Tuesday. US gold futures gained 0.1% to $1,774.10.
While the market is concerned about rate hikes going into the nonfarm payrolls data, the spread of the Delta variant globally is supporting gold prices, said Stephen Innes, managing partner at SPI Asset Management.
But “it is going to be quiet unless we do get a decisive break on either side of $1,775 or $1,750 levels”, he added.
The spread of the Delta variant of Covid-19 has prompted France to delay the easing of restrictions in the Landes region, while coronavirus infections have surged in Asia.
Investors are now awaiting the US nonfarm payrolls report on Friday for clues on the Fed’s next step.
Data released on Wednesday showed US private payrolls increased more than expected in June as companies rushed to boost production and services amid a rapidly reopening economy.
Federal Reserve Bank of Dallas president Robert Kaplan said on Wednesday that he would like the Fed to start reducing its support for the economy before the end of 2020, in part to make an abrupt policy tightening less likely later on.
A Fed rate hike will increase the opportunity cost of holding bullion, dulling its appeal.
Silver rose 0.3% to $26.19/oz, palladium fell 0.6% to $2,764.27/oz and platinum shed 0.3% to $1,069.44/oz.
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