Gold hits 1-week low as renewed risk appetite dulls lustre

gold risk appetite renewed lustre
Middle East

Gold hits 1-week low as renewed risk appetite dulls lustre

Gold dropped for a second straight session to its lowest level in more than a week on Wednesday, as risk appetite resumed with equities and U.S. bond yields rebounding to curb safe-haven bullion bids. Spot gold fell 0.4% to $1,803.11 per ounce by 12:34 p.m. EDT, having hit a low since July 12 of $1,793.59. U.S. gold futures settled 0.4% down at $1,803.40. Surging Delta variant COVID-19 infections, which raised fears over a stalling global economic recovery, had weighed on risk sentiment and sparked an equities sell-off on Monday, but stocks and bond yields have since recovered, dimming safe-haven bullion's appeal. "There's a sigh of relief in equities and Treasuries and oil are back up again. These are signs of the reflation trade, which is not good for gold," said Phillip Streible, chief market strategist at Blue Line Futures in Chicago. But Streible said reflation with higher economic growth and rising inflation was positive for silver, platinum and palladium which also have industrial applications. Higher yields weigh on non-yielding gold, as it raises its opportunity cost. "We're back in this push-pull market condition with some factors affecting the gold market positively and others negatively," said David Meger, director of metals