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Reuters

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Gold prices climbed on Friday on concerns over rising cases of the Delta variant, although uncertainties over the U.S. Federal Reserve’s tapering timeline kept bullion on course for a weekly drop.

Spot gold rose 0.2% to $1,755.90 per ounce by 0832 GMT. However, it was down 0.4% for the week, after last week’s U.S. jobs report boosted early tapering expectations and sent bullion prices to a four-month low on Monday.

U.S. gold futures gained 0.4% to $1,758.40.

“It’s been a slow grind back for gold prices after Monday’s flash crash lows. If U.S. yields and the dollar continue to rise, then that is likely to act as a headwind,” said Michael Hewson, chief market analyst at CMC Markets.

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“Markets now appear to be comfortable with the idea of tapering, so that’s unlikely to be a negative. The key question for gold bugs will be over the timing of rate hikes.”

Surging COVID-19 cases in the United States and elsewhere has weighed on investors risk sentiment, driving some safe-haven inflow into gold.

Fitch Solutions said in a note that demand for gold should remain robust amid elevated inflation rates and pandemic-related uncertainties, sustaining the appetite for safe-haven assets.

Meanwhile, the dollar held below a four-month high hit earlier this week and was on track for a second consecutive weekly gain.

Gold is seen as a hedge against inflation, but a Fed rate hike will increase the opportunity cost of holding non-yielding bullion.

“In short, we see a protracted period of consolidation just now for gold. Encouragingly, we are starting to see good gains in silver which will reinforce those gains in gold,” independent analyst Ross Norman said.

Silver gained 0.5% to $23.28 per ounce, but was down 4.3% for the week.

Platinum fell 0.2% to $1,016.32 but was headed for its best weekly performance since late June.

Palladium fell 0.4% to $2,614.58 per ounce. (Reporting by Arundhati Sarkar in Bengaluru; Editing by Subhranshu Sahu)

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