new narrative. covid delta good for US dollar

Gold futures edge lower as COVID delta variant’s spread helps support the dollar

Last Updated: July 19, 2021 at 11:01 a.m. ET

First Published: July 19, 2021 at 8:04 a.m. ET

By Myra P. Saefong and Mark DeCambre

Reports indicated that the highly transmissible delta variant of COVID-19 is sparking a fresh resurgence in infections in the U.S., and elsewhere in the world. As many as 82 million Americans remain unvaccinated or without COVID-19 antibodies and there are growing concerns that the delta variant could deliver a fresh blow to the economy.

The worries are driving investors into the safety of dollars, which is putting some initial pressure on gold, which would ordinarily draw haven bids. The U.S. dollar was up 0.1%, as gauged by the ICE U.S. Dollar Index, which measures the buck against a half-dozen major currencies.

A stronger dollar can make assets priced in the currency, like precious metals, more expensive for overseas buyers.

“For now, we do see more strength for the dollar index and this is pushing the gold price lower,” wrote Naeem Aslam, chief market analyst at AvaTrade, in a daily note.

Aslam said that the fact that gold remains above its 100-day moving average at $1,791.17 an ounce, according to FactSet data, is a good sign for bullish investors, but warned that trades below that level could turn the tide to the negative for the precious metal.

https://www.marketwatch.com/story/gold-futures-fall-as-dollar-bucks-up-amid-spread-of-covid-delta-variant-11626696260?