* Dollar up 0.3% against its rivals
* U.S 10-year treasury yield drops to lowest since Feb.
* Dollar strength a key headwind, says analyst (Updates prices and adds comment)
July 19 (Reuters) - Gold prices slipped to a one-week low on Monday as investors sought comfort in the U.S. dollar amid rising coronavirus cases.
Spot gold fell 0.5% to $1,802.26 per ounce by 1248 GMT. U.S. gold futures slipped 0.7% to $1,802.00.
Making gold more expensive for holders of other currencies, the dollar strengthened 0.3% to a more than three-month high against its rivals.
“The dollar strength is limiting gold’s upside and sort of remains one of the key headwinds,” said Harshal Barot, a senior research consultant for South Asia at Metals Focus.
“There are emerging concerns about the Delta variant and its impact on global economic growth. So, primary safe-haven flows are also going into the dollar and bonds.”
Gold’s losses came despite U.S. 10-year Treasury yields dropping to their lowest since mid-February.
independent analyst Ross Norman also said gold’s failure to convincingly breach the $1,820 level, and move higher, “had a detrimental impact.”
Sentiment in wider financial markets took a beating as investors feared a relentless surge in coronavirus cases and growing inflationary pressures.
Meanwhile, many Asian countries have been forced into taking lockdown measures as they struggle to curb the highly contagious Delta variant of the coronavirus.
Focus also remains on the European Central Bank, when policymakers are set for a showdown as they chart a new policy path amid growing fears of a third wave of coronavirus infections.
“(Gold) investors are also pricing in the expectation that recent spikes in inflation will force the hand of the Fed, driving a higher likelihood of earlier than previously expected rate hikes and tapering of the asset purchase program,” said Ricardo Evangelista, a senior analyst at ActivTrades.
Elsewhere, silver dropped 2% to $25.15 per ounce, platinum slipped 2.8% to $1,071.21, and palladium fell 1.9% to $2,579.20. (Reporting by Arundhati Sarkar and Brijesh Patel in Bengaluru; Editing by Shailesh Kuber and Jason Neely)
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July 19, 2021 at 03:55PM
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PRECIOUS-Gold hits one-week trough as dollar gains - Reuters
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