FX.co ★ Gold remains strong amid pressure from USD

The geopolitical situation remains difficult in Afghanistan. At the same time, the coronavirus does not loosen its grip on the world. As a result, investors turn to safe-haven assets. Yesterday, US 10-year bond yields fell by 3.2 basis points to 1.239%.

An increase in demand and drop in yields are holding the precious metal around the 1.790 resistance. A breakout of the barrier may return the quote in the $1,790–$1,820 range.

Nevertheless, this is not enough to prevent gold from falling. After all, there is a strong factor in the market that affects gold prices which is the US dollar exchange rate.

The FOMC Minutes published on Wednesday revealed the regulator's willingness to start tapering. As a result, the greenback immediately went up. Yesterday, the US dollar skyrocketed to its 9-months high and closed up by 0.4%.

A stronger greenback has pushed gold down. On Thursday, the price closed at $1,783.10, down by $1.30, or 0.1%, marking its third consecutive decline. Since Tuesday, the precious metal has lost 0.4%.

Yesterday, gold also tumbled after the publication of a batch of fresh labor market data in the United States. Jobless claims declined by 29K to 348K, its lowest level in almost 18 months.

In addition, the Conference Board Leading Economic Index has had an effect on the price of gold. In June, the indicator soared by 0.9% from the previous month.

On Thursday, silver and other popular precious metals also incurred losses. Silver lost 0.9% to $23.21. Copper dropped by 1.9% to $4.04. Platinum sagged 2.5% and settled at $971.20. Meanwhile, palladium closed at $2,297.90 yesterday, tumbling by over 5%.

OANDA analyst Craig Earlam suggests that the commodity market will remain under pressure. At the same time, he expects gold to break the $1,800 mark.

Meanwhile, the rapid spread of the coronavirus and its new variants is believed to be the main driver of gold. The University of Oxford has recently published the result of its research into the efficacy of vaccines against the Delta variant of COVID-19. Unfortunately, they turned out to be disappointing.

All this has caused turbulence in the stock market, which lead to an increase in demand for safe-haven assets. Assessing coronavirus risks, the quote went up during early trading hours on Friday. At the moment of writing, gold soared by $5.35 to $1,788.35.