Gold hits more than one-week high on virus surge jitters


Glittering haven: Gold of various weights and sizes sit at Gold Investments Ltd bullion dealers in London. — Bloomberg

BENGALURU: Gold prices hit a more than one-week high on Tuesday as surging coronavirus Delta variant cases raised concerns over its impact on the pace of economic recovery, driving investors towards safe-haven assets.

Spot gold rose 0.2% to $1,791.55 per ounce by 0655 GMT, after hitting a peak since Aug. 6 at $1,792.83.

U.S. gold futures were up 0.2% at $1,793.00.

Kunal Shah of commodities trader Nirmal Bang Commodities in Mumbai said that rising cases of the coronavirus in the United States and China, and prospects of a slowdown is global growth in the second half of the year, would support gold prices.

"I am expecting gold to touch $1,850 this year," Shah added.

Recent data showing a sharp drop in U.S. consumer confidence and a bigger than expected drop in the New York Federal Reserve's Empire State manufacturing business index have allayed some concerns of an early policy tightening by the central bank.

Data on Monday showed China's factory output and retail sales growth slowed sharply in July amid new COVID-19 outbreaks, adding to signs its economic recovery is losing momentum.

Focus is now on U.S. retail sales data due later in the day as well as the minutes of Fed's July meeting on Wednesday for cues on the central bank's stimulus tapering.

"If retail sales come out low, ultimately that means that the Fed will have to continue adding money to the system and this will keep rates low and this should be supportive for gold," said Stephen Innes, managing partner at SPI Asset Management.

Meanwhile, the U.S. dollar, often seen as the ultimate safe-haven currency, was up 0.1%.

Asian shares declined on growing anxiety over the spike in the Delta variant infections and concerns over China's regulations for its internet sector.

Markets were also tracking escalating tensions over Afghanistan.

Elsewhere, silver rose 0.2% to $23.86 per ounce, having hit a high since Aug. 9 at $23.95.

Platinum fell 0.6% to $1,016.13, while palladium was down 0.9% at $2,582.96. - Reuters

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