Commodity Market: Gold poised for third weekly gain in a row due to Delta variant concerns, US Treasury yields drop

Spot Gold remained mostly steady during Friday’s European session and was set to register its third consecutive week of advance, as US Treasury yields fell while the spread of the more infectious Delta variant of the novel coronavirus caused certain concerns.

US 10-year government bond yields were holding close to a more than four-month trough, which translated into lower opportunity cost of holding non-interest yielding bullion.

Among other fundamentals supporting Gold, an official government report showed yesterday that the number of Americans filing for unemployment benefits unexpectedly surged last week, which suggested labor market recovery was still choppy.

“The new rise in the Delta variant is causing some concerns on global growth and the data out of the U.S. started to ease off a little bit, which are helping gold,” Stephen Innes, managing partner at SPI Asset Management, was quoted as saying by Reuters.

“Real rates coming down is very supportive for gold. However, the dollar is holding up to a large degree and I think that in itself is limiting gold’s move,” he added.

The US Dollar was maintaining ground not far from a three-month peak, limiting the yellow metal’s upside.

As of 8:44 GMT on Friday Spot Gold was inching up 0.04% to trade at $1,803.20 per troy ounce. Yesterday the metal climbed as high as $1,818.54 per troy ounce, which has been its strongest price level since June 17th ($1,825.33 per troy ounce).

Gold was on track to register its third straight week of gains, while being up 0.89%. The precious metal has risen 1.87% so far in July, following a 7.14% loss in June.

Meanwhile, Gold futures for delivery in August were edging up 0.17% on the day to trade at $1,803.35 per troy ounce, while Silver futures for delivery in September were up 0.03% to trade at $25.995 per troy ounce.

The US Dollar Index, which reflects the relative strength of the greenback against a basket of six other major currencies, was edging up 0.11% to 92.453 on Friday. Earlier this week the DXY rose as high as 92.845, which has been its strongest level since April 5th (93.071).

Near-term investor interest rate expectations were without change. According to CME’s FedWatch Tool, as of July 9th, investors saw a 100.0% chance of the Federal Reserve keeping borrowing costs at the current 0%-0.25% level at its policy meeting on July 27th-28th, or unchanged compared to July 8th.

Daily Pivot Levels (traditional method of calculation)

Central Pivot – $1,805.08
R1 – $1,815.95
R2 – $1,829.41
R3 – $1,840.28
R4 – $1,851.15

S1 – $1,791.63
S2 – $1,780.76
S3 – $1,767.30
S4 – $1,753.85