* Record high U.S. equities capping gold’s upside
* Investors awaiting U.S. jobs data due on Friday
Gold drifted sideways on Monday as investors were caught between fears of a spike in the highly transmissible Delta strain of the coronavirus and expectations of an early interest rate hike by the U.S. Federal Reserve.
Non-yielding gold, which is also seen as a safe investment during uncertain times, tends to fall out of favour among investors when interest rates rise.
Spot gold was steady at $1,779.70 per ounce by 13:31 p.m. EDT (1731 GMT). U.S. gold futures settled up 0.2% at $1,780.70.
There are growing concerns about the spread of the Delta variant of the coronavirus, which is bringing back a slight bid into the gold market from a safe-haven perspective, said David Meger, director of metals trading at High Ridge Futures.
“Although, no rallies continue to follow through because of the recent set of rhetoric in regards to the potential for reducing asset purchases (by the U.S. Fed).”
Gold suffered its biggest intraday drop in five months after the Fed signalled earlier than expected policy tightening on June 16.
The S&P 500 and the Nasdaq hit record levels, limiting bullion’s gains.
“That takes some of the wind out of the sails of the gold market, and the reason why we saw gold fall below $1,800 level recently was based on that,” Meger added.
Investors are looking to U.S. non-farm payrolls data on Friday.
The potential for a stronger jobs report this week could inhibit positive flows into gold for now, TD Securities wrote in a note.
“In this context, gold is not completely out of the woods just yet, with another leg lower toward the $1,730 per ounce region opening the door to another round of CTA (Commodity Trading Advisor) selling.”
Elsewhere, silver rose 0.1% to $26.09 per ounce, platinum slid 1.4% to $1,095.70, and palladium gained 1.6% to $2,679.92. (Reporting by Swati Verma in Bengaluru; Editing by Kirsten Donovan, Bernadette Baum and Nick Zieminski)
By Swati Verma
Source: Reuters
