May 26, 2024

Gold edges up on Delta virus threat, lower US bond yields

By Administrator_ India

Capital Sands

Gold prices edged higher on Monday, lifted by a retreat in U.S. Treasury yields and concerns that a surge in coronavirus cases could dampen global economic recovery, though an uptick in the dollar limited gains for the safe-haven metal.

Spot gold was up 0.1% at $1,812.83 per ounce, as of 0243 GMT, after falling 1% in the previous session.

U.S. gold futures eased 0.1% to $1,813.70.

“Covid-driven risk aversion is driving Asian markets today after a weak finish on Wall Street on Friday,” said Jeffrey Halley, a senior market analyst at OANDA.

“Some short-covering is providing modest support to gold, but it not displaying any clear momentum in either direction.”

Sentiment in wider financial markets remained weak as investor risk appetite was soured by growing inflationary pressures and a relentless surge in coronavirus cases.

Many countries, particularly in Asia, are struggling to curb the highly contagious Delta variant of the coronavirus and have been forced into taking lockdown measures.

Gold is used as a safe investment during times of political and financial uncertainty.

Benchmark 10-year Treasury yields dropped to a near two-week low, reducing the opportunity cost of holding non-interest-bearing gold.

However, safe-haven gains for the U.S. dollar limited gold’s appeal, as the dollar index strengthened 0.1% towards a three-month high against its rivals.

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