Gold was flat as a dollar strength offset concerns about the virus

Gold was flat as a dollar strength offset concerns about the virus

Gold prices were unchanged in early Asian trade on Wednesday, as the precious metal was caught between a firmer dollar and safe-haven demand driven by the delta coronavirus variant fears.

Fundamentals

Spot gold was at $1,785.66 an ounce at 0103 GMT, after hitting $1,795.25 on Tuesday, its highest since August 6. U.S. gold futures were flat at $1,787.20.

On Wednesday, the dollar touched a nine-month high against the euro and stayed near recent highs in other major currencies.

During political and financial uncertainty, gold often competes with the dollar as a safe store of value, with a rising dollar making gold more expensive for people holding foreign currencies.

Minneapolis Federal Reserve President Neel Kashkari said on Tuesday that starting to reduce the Fed’s bond-buying program later this year could be “reasonable,” though it would depend on additional growth in the labor market.

Investors now await the minutes from Fed’s July meeting for any guidance on taper plans.

The SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.3% to 1,017.14 tons Tuesday from 1,020.63 tons Monday.

Silver rose 0.1% to $23.65 per ounce.

Platinum rose 0.2% to $999.53 after falling 2.5% in the previous session.

Palladium rose 1.1% to $2,516.22, after falling 4.5% on Tuesday.

Damon Harrison
Market Analyst, IPG Group