Gold Holds Steady as Safe Haven Appeal Rises Even as US Dollar Strengthens

Early on Tuesday, gold is holding steady close to the highest levels seen since a week as the spread of the delta variant of COVID-19 around the world hikes up the safe haven demand of both the precious metal as well as the US dollar. At the time of writing, GOLD is trading at a little above $1,786.

The US especially has seen a sharp increase in infections, with the daily count of fresh cases rising by more than 80% over the past two weeks. The highly contagious variant of the coronavirus accounts for at least 93% of the infections the US has been seeing in recent weeks, spreading rapidly among the unvaccinated population of the nation.

The safe haven appeal of gold has also been supported by the ongoing turmoil in Afghanistan, after the Taliban seized the capital of Kabul. Countries have started evacuating their citizens from Afghanistan even as its own people are desperately trying to flee the country amid the ongoing crisis.

Recent economic data from China also lent support to the yellow metal after it came in below expectations as the world’s second most powerful economy tries to contain the latest spread of COVID-19. During the month of July, retail sales, industrial production as well as fixed asset investment came in weaker than forecast, raising concerns that China’s economic recovery was under strain.

Later today, gold prices could see some movement on the release of retail sales data from the US. After the consumer sentiment posted a decline, investors will closely monitor this data to see if consumers in the US have turned more cautious about their spending plans owing to the latest wave of the pandemic.