Gold firms as virus concerns spur safe-haven demand


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Gold prices edged higher on Wednesday as fears that the Delta coronavirus variant may stall economic recovery drove investors towards safe-haven assets, although a stronger dollar kept bullion gains in check.

Spot gold was up 0.1% at $1,812.48 per ounce, as of 0645 GMT. U.S. gold futures rose 0.1% to $1,813.70.

“Asian investors are still buying gold on dips as a haven play given that local stock markets have shown no sign of recovering. Clearly markets are now starting to price in a slower Asia recovery due to COVID-19,” said Jeffrey Halley, a senior market analyst at OANDA.

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Asian shares gave up early gains as jitters about surging virus infections hammered risk sentiment.

However, the dollar, also considered a safe bet, stood on the verge of fresh year-to-date peaks, potentially trimming appetite for gold by making the metal more expensive for holders of other currencies.

“Even though gold is considered a safe haven, in times where there are true concerns about growth outlook, policy going forward and there is a drive to safety, the U.S. dollar always wins out,” said IG Market analyst Kyle Rodda.

Investors now shift their focus to the European Central Bank meeting on Thursday where policymakers are expected to chart a new path to reflect a change in strategy and show the bank is serious about reviving inflation.

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Spot gold may break a support at $1,805 per ounce and fall towards a range of $1,795 to $1,800, according to Reuters technical analyst Wang Tao.

Elsewhere, silver rose 0.9% to $25.12 per ounce, after hitting a more than three-month low in the session.

“Silver prices are under pressure on concern that the spread of the new coronavirus Delta variant infections will lead to additional pandemic restrictions that undercut economic activity and demand for industrial metals,” Avtar Sandu, a senior commodities manager at Phillip Futures, said in a note.

Palladium gained 0.9% to $2,658.53, and platinum climbed 0.6% at $1,072.33.

(Reporting by Brijesh Patel in Bengaluru; editing by Subhranshu Sahu and Jason Neely)