Picture: DARIO HAYASHI
Picture: DARIO HAYASHI

Bengaluru — Gold prices fell on Thursday, hovering near a more than one-week low, weighed down by a stronger dollar and a rebound in risk sentiment as investors looked past economic threats from rising cases of the Delta coronavirus variant.

Spot gold was down 0.3% at $1,798.27/oz, as of 3.13am GMT, after hitting its lowest level since July 12 at $1,793.59 in the previous session. 

US gold futures eased 0.3% to $1,798.70/oz.

“Gold prices are under pressure because the dollar is now hovering around its highest level in three months and Wall Street rebounded for the second day, meaning that traders are shrugging off virus concerns and back to reflation trade,” said Margaret Yang, a strategist at DailyFX.

Asian stocks rallied on Thursday on the back of overnight gains on Wall Street, as investors largely overlooked apprehension about the Delta coronavirus variant and inflation.

The dollar index held steady, hovering below a three-and-a-half-month peak ahead of the European Central Bank (ECB) policy decision later in the day.

Policymakers will implement changes to their strategy for the first time and are all but certain to promise an even longer period of stimulus to make good on the commitment to boost inflation.

“ECB is widely expected to remain dovish, so this may lead the euro to weaken against the dollar, causing the greenback to rise, which will be negative for gold. For now, gold’s near-term momentum seems to tilted to the downside,” Yang said.

Meanwhile, benchmark US treasury yields continued their bounce from five-month lows after a weak 20-year bond auction.

Spot gold may break support at $1,795/oz and fall towards $1,785, according to Reuters technical analyst Wang Tao.

Among other precious metals, silver edged 0.1% lower to $25.21/oz, palladium rose 0.4% to $2,665.21, and platinum was steady at $1,080.39.

Reuters

subscribe

Would you like to comment on this article or view other readers' comments?
Register (it’s quick and free) or sign in now.

Speech Bubbles

Please read our Comment Policy before commenting.