By Gina Lee
Investing.com – Gold was down on Thursday morning in Asia, remaining close to a one-week low. A strengthening dollar and increasing risk appetite as concerns over surging COVID-19 cases abated, both decreasing the yellow metal’s appeal to investors.
Gold futures edged down 0.20% to $1,799.80 by 1:21 AM ET (5:21 AM GMT) after hitting its lowest level since Jul. 12 during the previous session. The dollar, which usually moves inversely to gold, inched up on Thursday to just below three-and-a-half-month highs.
Global shares also reported gains as investors seemingly moved past concerns about the rising numbers of COVID-19 cases involving the Delta variant and inflationary pressures.
“Gold prices are under pressure because the dollar is now hovering around highest in three months and Wall Street rebounded for the second day meaning that traders are shrugging off COVID-19 concerns and back to reflation trade,” DailyFX strategist Margaret Yang told Reuters.
Investors now await a European Central Bank (ECB) policy decision later in the day, where the central bank is widely expected to maintain a dovish stance and implement changes in its strategy for the first time.
“ECB is widely expected to remain dovish, so this may lead euro to weaken against the dollar causing the greenback to rise, which will be negative for gold. For now, gold’s near-term momentum seems to be tilted to the downside,” said Yang.
Bank Indonesia will also hand down its policy decision later in the day.
Meanwhile, benchmark 10-year U.S. Treasury yields continued their climb up from five-month lows following a weak 20-year bond auction.
In other precious metals, silver inched down 0.1%, palladium rose 0.4% and platinum was steady at $1,080.39.