Gold prices eased on Thursday as a stronger dollar and bets over an early policy tapering by the U.S. Federal Reserve weighed on sentiment, although losses for the safe-haven metal were limited by concerns that rising COVID-19 cases will slow global growth.
Spot gold fell 0.5% to $1,778.65 per ounce by 2:21 p.m. EDT. U.S. gold futures settled down 0.1% at $1,783.1.
Weighing on gold, the U.S. dollar rose to nine-month highs after minutes from the Fed’s July meeting showed officials largely expected they could ease stimulus this year, even though consensus on other key issues appeared elusive.
“The only thing that is not clear as yet is when this (taper) might happen. Nonetheless, tapering has once again been priced into gold now,” Commerzbank analyst Daniel Briesemann said.
Data earlier showed the number of Americans filing new claims for unemployment benefits fell to a 17-month low last week, underscoring recent views from Fed officials about labour market recovery.
Market focus is now on the annual meeting on Aug. 26-28 of central bankers in Jackson Hole, Wyoming.
Taper talks and concerns over rising COVID-19 Delta variant cases hammered risk sentiment in wider financial markets, driving investors towards safe-haven assets.
“Gold is certainly benefiting from its safe haven status. While equity markets are falling heavily, gold is back in demand. Clearly COVID nerves are coming through,” OANDA analyst Craig Erlam said.
“A move above $1,800 looks more achievable,” Erlam added. “In the medium-term, downside pressure will remain on gold but that won’t stop it reaping the benefits of the jitters.”
Gold prices are up about 6% from a more than four-month low of $1,684.37 hit last week.
Elsewhere, silver fell 1.4% to $23.15 per ounce.
Platinum dipped 2.5% to $969.88 per ounce, and palladium shed 4.8% to $2,311.19 per ounce, having hit its lowest level since mid-March at $2,299.57.