PRECIOUS-Gold gains on Delta variant worries ahead of key U.S. jobs data

  • 7/1/2021
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(Updates prices) * France delays COVID-19 restrictions easing due to Delta variant * Fed’s Kaplan says he wants taper to start ‘soon,’ be gradual * Investors await U.S. jobs data due on Friday July 1 (Reuters) - Gold prices rose on Thursday as concerns over the more infectious Delta variant of COVID-19 bolstered its safe-haven appeal, ahead of U.S. jobs data seen as crucial to the Federal Reserve’s policy outlook. Spot gold gained 0.4% to $1,776.40 per ounce by 0710 GMT and U.S. gold futures climbed 0.4% to $1,776.50. While the market is concerned about rate hikes going into the non-farm payrolls data, the spread of the Delta variant globally is supporting gold prices, said Stephen Innes, managing partner at SPI Asset Management. Rising cases of the Delta variant have prompted France to delay the easing of restrictions in the Landes region, while infections have also surged in Asia. Investors are now awaiting the U.S. non-farm payrolls (NFP) report due on Friday for clues on the Fed’s next step. “The Fed is keen on signs of continued strength in the jobs market as a guide to tapering. The ADP data was better than expected and if that feeds into the NFP data this week, then gold may weaken again as the case for ‘tapering’ is stronger,” said Nicholas Frappell, global general manager at ABC Bullion. “Gold has held well at current levels but has yet to break out of the ongoing consolidation.” Federal Reserve Bank of Dallas President Robert Kaplan said on Wednesday he would like the Fed to start reducing its support for the economy before the end of the year, in part to make an abrupt policy tightening less likely later on. A Fed rate hike will increase the opportunity cost of holding bullion, dulling its appeal. Silver rose 0.4% to $26.22 per ounce, palladium fell 1% to $2,751.5 and platinum gained 0.1% to $1,073.5. (Reporting by Sumita Layek and Arundhati Sarkar in Bengaluru; Editing by Aditya Soni and Subhranshu Sahu) Our Standards: The Thomson Reuters Trust Principles.

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