Gold futures were under pressure early Monday, amid a strengthening of the U.S. dollar and a global selloff of equities, partly prompted by renewed concerns about the spread of the COVID-19 delta variant.
was trading down $10.80, or 0.6%, at $1,804.30 an ounce, after bullion on Friday put in a weekly gain of about 0.2% to mark its fourth straight weekly rise, matching its longest such streak since the period ended May 28, FactSet data show.
Reports indicated that the highly transmissible delta variant of COVID-19 is sparking a fresh resurgence in infections in the U.S., and elsewhere in the world. As many as 82 million Americans remain unvaccinated or without COVID-19 antibodies and there are growing concerns that the delta variant could deliver a fresh blow to the economy.
The worries are driving investors into the safety of dollars, which is putting some initial pressure on gold, which would ordinarily draw haven bids. The U.S. dollar was up 0.3%, as gauged by the ICE U.S. Dollar Index, which measures the buck against a half-dozen major currencies.
A stronger dollar can make assets priced in the currency, like precious metals, more expensive for overseas buyers.
“For now, we do see more strength for the dollar index and this is pushing the gold price lower,” wrote Naeem Aslam, chief market analyst at AvaTrade, on a daily note.
Aslam said that the fact that gold remains above its 100-day moving average at $1,791.17 an ounce, according to FactSet data, is a good sign for bullish investors, but warned that trades below that level could turn the tide to the negative for the precious metal.
The selloff in equities also came as the benchmark 10-year Treasury note
was receding to its lowest levels since mid February at 1.228%.
Meanwhile, silver futures for September delivery
was trading $12.70, or 0.7%, at $1,802.40 an ounce, after registering a 1.7% weekly decline on Friday, its second in a row