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Gold edges up on Delta virus threat, lower U.S. bond yields

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Gold prices edged higher on Monday, on the back of falling US Treasury yields and concerns that a surge in coronavirus cases could dampen the global economic recovery, although the dollar’s rise has been limited. limit gains for safe-haven metals.

Spot gold rose 0.1% to $1,812.83 an ounce, at 0243 GMT, after falling 1% in the previous session.

US gold futures fell 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, senior market analyst at OANDA. Halley, senior market analyst at OANDA said.

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“Some short selling is providing modest support for gold, but it is not showing any clear momentum in either direction.”

Sentiment across the broader financial markets remains weak as investors’ risk appetite is weakened by growing inflationary pressures and the relentless rise in coronavirus cases.

Many countries, especially in Asia, are struggling to limit the highly contagious Delta variant of the coronavirus and have been forced to take containment measures.

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

The yield on the benchmark 10-year Treasury note fell to a near two-week low, reducing the opportunity cost of holding zero-yield gold.

However, safe-haven gains in the US dollar limited gold’s appeal, as the dollar index rose 0.1% to a three-month high against its rivals.

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“Negative real yields seem to be boosting gold prices as the dollar strengthens. We expect the US dollar to weaken as other central banks raise interest rates,” ANZ analysts said in a note.

“Inflows into gold and silver-backed ETFs are stabilizing as the discussion of fiscal tightening increases. Speculative positioning in favor of both gold and silver leaves room for prices to rise. “

Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell 0.6% to 1,028.55 tonnes on Friday, its lowest level since May 14.

Elsewhere, silver fell 0.6% to $25.50 an ounce, palladium rose 0.2% to $2,635.65 and platinum fell 0.2% to $1,100.55. (Reporting by Brijesh Patel in Bengaluru, Editing by Sherry Jacob-Phillips)

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