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Gold prices decline but stay near the $1800 level

Gold prices

Gold prices witnessed a decline Tuesday but remained near the psychologically important level of $1800.

The increasing threat of the high number of the mutated strain of Coronavirus infections is feeding expectations that the Federal Reserve may delay easing its accommodative stance.

Gold fell in spot transactions 0.1% to $ 1803.53 an ounce, after it jumped about 1.4% on Monday.

In US futures, gold prices settled at $1806.30. The dollar index stabilized after falling about 0.6% on Monday.

Hou Lee, economist at OCBC Bank, said the fact that gold again crossed the $1,800 mark says the market is still very concerned about the delta strain.

IHS Markit data showed that business growth in the United States slowed for the third consecutive month in August, while the fast-spreading delta strain weakened the recovery momentum.

Investors are now focused on a scheduled speech by US Federal Reserve Chairman Jerome Powell at the annual Jackson Hole symposium in Wyoming, as they await any indications of plans by the US central bank to reduce stimulus.

Asian stocks received support today from the easing of concern about an immediate reduction of stimulus.

As for other precious metals, silver fell 0.3% to $23.59 an ounce, while platinum rose 0.2% to $1015.41.

Palladium gained 0.4% to reach $2410.42. Prices rose 5.5% in the previous session in the biggest one-day gain since May 2020.

The dollar rose to its highest level in nine months.

The dollar index, which measures the performance of the US currency against six competing currencies, extended its gains in early trading in London, rising 0.3% to its highest level since November 5, 2020, at 93.434.

The euro fell to its lowest level at $1.16655 for the first time since the fourth of November, while the dollar rose to its highest level at 110.225 against the Japanese yen.

The Canadian dollar also hit a four-week low of $1.2699.

Reducing bond purchases is considered positive for the US dollar as it is expected to raise government bond yields, making holding dollar-denominated assets more attractive to investors.

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