Gold slide continues

Traders await Jackson Hole outcome

The price of gold continued to fall on Wednesday, affected by a strengthened dollar. 

The yellow metal had enjoyed a fortnight of healthy gains before Tuesday, rising from what was then a four-month low of $1,719 per troy ounce (spot) to $1,806, a three-week high. 

With Asian markets managing to hold on to this week’s gains and the US dollar index still rising marginally higher, the appeal of gold continued to wane. 

Delta variant waxes and wanes

Indeed, investor sentiment and appetite for risk can generally be said to be higher than in recent weeks. The spectre of the Delta variant hung over markets both in Asia and North America. 

In China, authorities reintroduced a number of severe restrictions as part of its zero-COVID approach. In the most discussed case, authorities shut down part of one of the world’s busiest ports after only one worker tested positive. The United States similarly wrestled with a slew of breakout cases and the onset of the variant. 

Amid such a global picture, gold, a traditional safe haven during times of uncertainty, benefited. 

At the start of the week, China reported no new locally transmitted coronavirus cases for the first time since July. Similarly, Dr Scott Gottlieb, the former commissioner of the Food and Drug Administration who also sits on the board of Pfizer, argued that the Delta variant may have started to peak in the US.

Jackson Hole 

Markets are also eagerly anticipating the results of the Federal Reserve summit in Jackson Hole, Wyoming at the end of this week. 

Should the central bank’s chairman Jerome Powell tone down his recent ‘hawk-ish’ comments, the commodity would benefit as a traditional inflation hedge. 

By late afternoon, spot gold traded down by 0.7% at $1,790 per troy ounce. 

Gold
Daily change
1783.28
Low: 1766.92
High: 1785.37

Further reading: Gold stabilises after drop to four-month low

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