Gold Rises Above $1,800 As Dollar Dips On Doubts Fed Will Taper Soon
Dollar retreats from 9-1/2-month peak hit last week * Palladium bounces off a five-month low, last up 6.4% * Delta risks push Fed Jackson Hole meeting online (New throughout, updates prices, market activity and comments, adds chart)
Gold vaulted over the key $1,800 psychological level on Monday as a retreat in the dollar pushed investors to bullion with rising coronavirus cases driving expectations that the U.S. Federal Reserve might delay tapering of economic support.
Spot gold rose 1.4% to $1,804.86 per ounce by 12:43 p.m. EDT (1643 GMT), after scaling its highest since Aug. 5 at $1,806.23.
U.S. gold futures gained 1.3% to $1,807.40.
“Stocks are up, dollar is down and it’s all being driven right now by the likelihood that the Federal Reserve might push back tapering further due to the Delta variant” of the coronavirus, said Bob Haberkorn, senior market strategist at RJO Futures.
A spike in COVID-19 cases prompted the Fed to schedule its Aug. 27 annual symposium in Jackson Hole, Wyoming virtually, with all eyes on Chair Jerome Powell’s speech for hints on the tapering timeline.
Traders are weighing expectations the Fed might not be in a position to ease its policy “anytime soon, which is bullish for gold and silver,” Haberkorn said.
Gold’s resurgence drove a jump in other metals, with silver up about 3% and palladium advancing over 6%.
Silver rose 2.7% to $23.64 per ounce, platinum climbed 2.1% to $1,016.73, and palladium bounced off a five-month low to gain 6% to $2,411.53.
Helping gold’s breakout was a broad retreat in the dollar , making bullion cheaper for those using other currencies.
Bullion’s rise came despite Wall Street’s rebound from last week’ sell-off.
A move further above the $1,800 level for gold may need additional drivers, given technical resistance around the 100-day and 200-day moving averages, said FXTM analyst Lukman Otunuga.
But if economic data expected this week “paints a positive image of the U.S. economy, this could fuel Fed taper expectations – ultimately boosting the dollar while weakening gold,” Otunuga added.