GOLD STEADY, SILVER FIRMER

GOLD DRIFTED sideways yesterday as investors were caught between fears of a spike in the highly transmissible Delta strain of the coronavirus and expectations of an early rate hike by the US Federal Reserve.

Non-yielding gold, also seen as a safe investment during uncertain times, tends to fall out of favour among investors when interest rates rise.

Spot gold was steady at around $1 779 (about R25 150) an ounce by 4.39pm. By 6.25pm, the price had inched higher to $1 780. US gold futures rose 0.2 percent to $1 780.

There are growing concerns about the spread of the Delta variant of the coronavirus which is bringing back a slight bid into the gold market from a safe haven perspective, said David Meger, director of metals trading at High Ridge Futures.

“Although, no rallies continue to follow through because of the recent set of rhetoric in regards to the potential for reducing asset purchases (by the US Fed).”

Gold suffered its biggest intra-day drop in five months after the Fed signalled earlier than expected policy tightening on June 16.

The S&P 500 and the Nasdaq hit record levels, capping gold’s gains.

“That takes some of the wind out of the sails of the gold market, and the reason why we saw the gold price fall below $1 800 level recently was based on that,” Meger added.

Investors are looking to US nonfarm payrolls data on Friday. The potential for a stronger jobs report this week could inhibit positive flows into gold for now, TD Securities wrote in a note.

“In this context, gold is not completely out of the woods just yet, with another leg lower toward the $1 730 an ounce region opening the door to another round of CTA (Commodity trading advisor) selling.”

Silver gained 0.1 percent to $26.09 an ounce, platinum retreated 1.2 percent to $1 097.26, and palladium rose 1 percent to $2 662.88.