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Gold prices rise as COVID-19 woes boost safe-haven appeal

Gold prices rise as COVID-19 woes boost safe-haven appeal

Spot gold was up 0.4% at $1,792.42 per ounce by 0636 GMT, after hitting its highest since Aug 6 at $1,795.25 in the previous session

US gold futures rose 0.3% to $1,793.50 (Source:Reuters) US gold futures rose 0.3% to $1,793.50 (Source:Reuters)

Gold prices rose on Wednesday to hover near a two-week high, as growing concerns over the fast-spreading Delta COVID-19 variant and its economic impact lifted demand for the safe-haven metal.

Spot gold was up 0.4% at $1,792.42 per ounce by 0636 GMT, after hitting its highest since Aug 6 at $1,795.25 in the previous session.

US gold futures rose 0.3% to $1,793.50.

"The elephant in the room is this Delta variant and whether it does materially affect the global recovery. In that situation, gold is likely to find more haven buying," said Jeffrey Halley, a senior market analyst, Asia Pacific at OANDA.

"However, gold will struggle to overcome formidable technical resistance levels between $1,800 and $1,850. Gold's fate will be decided by the FOMC and whether they signal imminent tapering in September."

Risk sentiment in wider financial markets remained weak, with Asian shares hovering near year-to-date lows as the Delta variant sweeps through the region.

Adding to signs of a slowdown in the economy, US retail sales fell more than expected in July.

Investors now await the minutes of the Federal Reserve's July policy meeting, due later in the day, for guidance on its tapering plans.

On Tuesday, Minneapolis Fed President Neel Kashkari said it could be "reasonable" to start tapering later this year, but that would depend on the progress in the labour market.

Meanwhile, Fed Chairman Jerome Powell said it remained unclear whether the heightened outbreak of the Delta variant would have a noticeable impact on the economy.

A bullish target range of $1,801-$1,811 per ounce has been temporarily aborted for spot gold. It will only be resumed when the metal breaks above $1,795, according to Reuters technical analyst Wang Tao.

Silver rose 0.5% to $23.75 per ounce, while platinum climbed 1.1% to $1,008.60.

Palladium rose 1.7% to $2,532.18, rebounding from its lowest level in nearly two months hit on Tuesday.

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