Gold Drops to 10-Week Low as Dollar Gains on Covid Concerns – Yahoo Finance


(Bloomberg) — Gold slipped to the lowest since mid-April as the dollar firmed on mounting concerns about the delta coronavirus strain in Europe.

The highly contagious virus strain that originated in India is becoming dominant in France and Germany. It has also become the main variant in South Africa’s commercially important Gauteng province, and close to half of Australia’s population is now in lockdown as it struggles to contain the delta variant. A gauge of the dollar strengthened on haven demand, pressuring bullion.

The strength in the greenback “is a major drag on gold,” said Carsten Fritsch, an analyst at Commerzbank AG. “Gold repeatedly failed to overcome the 100-day moving average in recent days, which was a bearish sign. There is a risk now that so far patient ETF investors jump on the bandwagon and sell their holdings. This would amplify the downward move.”

Bullion is headed for the biggest monthly drop in more than four years after the Federal Reserve pulled forward its forecasts for interest rate hikes. Gold has slid below $1,800 an ounce this month and traders are now focused on the timing of when policy makers may start dialing back stimulus.

Investor holdings of gold-backed exchange-traded funds have remained steady this month after rising 1.6% in May, according to data compiled by Bloomberg.

Spot gold fell as much as 1.6% to $1,750.75 an ounce, the lowest since April 15, and was at $1,762.09 by 3:05 p.m. in New York. Prices are down 7.6% this month, the most since November 2016. Futures for August delivery on the Comex fell 1% to settle at $1,763.60. Spot silver, palladium and platinum all retreated. The Bloomberg Dollar Spot Index is up 2% in June, heading for the biggest monthly gain since March 2020.

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