International gold prices consolidated slightly on Friday, while concerns about the spread of the novel coronavirus variant of Delta boosted the safe-haven nature of the dollar. Investors are waiting for the US non-farm payrolls report, which could affect the timing of a shift in the Fed's policy stance.
Spot gold fell 0.03% to $1776.30 / oz in Beijing 15 21, the main contract for COMEX gold fell 0.3% to $1776.3 / oz, and the dollar index rose 0.16% to 92.685, breaking its highest level since April 6 to 92.699.
Yang Yan, strategist at DailyFX, said: "the spread of Delta variants is supporting gold prices because it may delay economic recovery." The medium-term outlook remains bearish as we prepare for the start of the contraction cycle. "
The highly contagious novel coronavirus mutant Delta has forced some Asian and European countries to delay reopening plans. The White House said it would send task forces to hot spots across the country to deal with the new anti-epidemic situation.
European Central Bank President Christine Lagarde said in a speech to the European Parliament that the eurozone economy may well have avoided the most pessimistic scenario envisaged at the beginning of the epidemic, but still faces the risk of a mutation of the virus.
"so far this week, the main driver of the interest rate market has been concerns about the spread of the Delta variant, with real yields being the main factor driving bond yields down," said (UniCredit) analysts at UniCredit.
Us non-farm payrolls data for June, to be released at 20:30 on Friday in Beijing, may show that 720000 jobs were added last month, up from 559000 in May, according to the survey.
Initial claims for unemployment benefits in the US fell more than expected last week, while layoffs fell to a 21-year low in June, in a sign of increased momentum in the job market's recovery from the novel coronavirus pandemic. But a shortage of workers willing to work hampers recruitment.
Some Fed officials have said in recent weeks that the Fed may start talking about shrinking its schedule in the coming months. Yang Yan of DailyFx said that if the non-farm payrolls report adds more than 1 million jobs, it is possible to speed up the Fed's program of shrinking tables and raising interest rates.
Fitch (Fitch Solutions), a rating agency, said in a report that while the contraction poses downside risks to gold, concerns about inflation will support prices in the short term.
