GOLD STEADY ON INVESTOR BETS

GOLD price consolidated above $1 800 (about R27 349) an ounce yesterday as some investors bet the recent surge in Covid-19 cases could steer the US Federal Reserve away from tapering its economic support at its Jackson Hole symposium.

Spot gold price rose 0.1 percent to $1 806.21 an ounce by 4.35pm. US gold futures also gained 0.1 percent to $1 808.20 an ounce.

Bullion hit a near-three week high on Monday, bolstered by a retreat in the dollar and on expectations that rising cases of the Delta variant could prompt the Fed to delay a winding down of economic support measures.

Reflecting the economic impact of the virus, was data showing US business activity growth slowed in August, while Asia’s robust economic recovery from last year lost steam.

Boosting gold, “the tenure of the marketplace has pivoted from thinking the Fed would lean hawkish at Jackson Hole symposium to one of the coronavirus keeping the Fed from doing anything as soon as they might have wanted to, and maybe even this year”, Jim Wyckoff, senior analyst at Kitco Metals, said.

A hike in interest rates translates into increased opportunity cost of holding non-yielding gold.

“What might be gold market sensitive is the Fed might start to say inflation isn’t as transitory as thought and that could prompt them to tighten policy down the road, though the impact of the virus should override inflationary concerns for now.”

The precious metal is also considered as a hedge against inflation.

Gold’s latest uptick also came despite outflows from exchange-traded funds.

Silver climbed 1.1 percent to $23.91 an ounce, while platinum rose 0.2 percent to $1 015.35 an ounce.

Palladium advanced 2.6 percent at $2 461.55 an ounce.

Prices climbed 5.5 percent on Monday.