Gold pinned near one-week peak on weak consumer sentiment print

Gold pinned near one-week peak on weak consumer sentiment print
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BENGALURU (Aug 16): Gold prices hovered near a one-week high on Monday, as a plunge in U.S. consumer sentiment allayed some concerns of an early tapering by the Federal Reserve.

Spot gold was flat at $1,779.51 per ounce by 0100 GMT, having earlier hit a high since Aug. 6 at $1,780.82. U.S. gold futures were up 0.2% to $1,781.20.

U.S. consumer sentiment dropped sharply in early-August to its lowest level in a decade, amid rising concerns over the Delta variant that could prompt Federal Reserve policymakers to pause decisions to pull back pandemic-era stimulus.

Gold is considered a hedge against inflation, likely to result from widespread stimulus.

The data weighed on the dollar index dragging it to a one-week low on Friday, making gold cheaper for holders of other currencies.

On the radar of investors this week would be minutes of the Fed's July meeting on Wednesday and chairman Jerome Powell's comments on Tuesday. Geopolitical uncertainties arising from Afghan government's collapse will also be closely watched.

Physical gold demand in Asia got a fillip last week as consumers snapped up bargains after prices dipped across regions, with premiums in top consumers India and China rebounding to multi-month highs.

SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings fell 0.2% to 1,021.79 tonnes on Friday from 1,023.54 on Thursday.

Speculators cut their net long positions in COMEX gold and silver in the week ended August 10, data from the U.S. Commodity Futures Trading Commission showed.

Silver fell 0.2% to $23.69 per ounce. Platinum dropped 0.7% to $1,019.86 and palladium was down 0.4% to $2,639.23.