* Dollar rise 0.1% against its rivals
* Focus shifts to ECB meeting on Thursday (Recasts, adds comment and updates prices)
July 21 (Reuters) - Gold dropped for a second straight session to its lowest in more than a week on Wednesday, as a firmer dollar and rebound in U.S. Treasury yields dented the metal’s allure.
Spot gold fell 0.3% to $1,804.54 per ounce by 10:19 AM EDT, having hit a low since July 12 at $1,793.59. U.S. gold futures dropped 0.4% to $1,804.40 per ounce.
The U.S. dollar traded close to its highest since the start of the year, making gold more expensive for holders in other currencies.
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, further dimming safe-haven bullion’s appeal.
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 trading at High Ridge Futures.
Meger noted that the possibility of the Fed’s transitory inflation view being proved correct, especially given rising COVID-19 cases, was a negative for an inflation-hedge like gold, but accommodative monetary policy in that scenario would support gold.
U.S. Federal Reserve officials will meet next week, while the European Central Bank meeting is on Thursday.
“More tapering talk amongst FOMC officials could drag gold back into the sub-$1800 levels, though more dovish messaging and market participants embracing such cues, could alleviate some of the downward pressure on gold prices,” said Han Tan, market analyst at Exinity Group.
“As long as the greenback remains as the dominant safe haven, spot gold is expected to remain suppressed,” Tan added.
In other precious metals, silver rose 1% to $25.16 per ounce, palladium was up 1% at $2,660.58 and platinum gained 0.4% to $1,070.80. (Reporting by Nakul Iyer and Arundhati Sarkar in Bengaluru; editing by David Evans)
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PRECIOUS-Gold hits 1-week low on firm U.S. dollar, rebounding yields - Reuters
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