16.08.202112:36 Forex Analysis & Reviews: Delta variant helped gold: the metal rose sharply amid a deterioration in consumer sentiment in the US

At the end of last week, the gold bars shone again. At the close of the session on August 13, they were trading at $1,778.2. Compared to Thursday, when the asset sank by 0.1%, it gained 1.5%, or $26.4 last Friday.

After the sharp collapse of the metal last Monday, most analysts did not believe that gold would be able to make up for losses by the end of the week, and even more so to go into the plus. However, contrary to forecasts, bullion showed growth at the end of the seven-day period. The price jumped by 0.9%.

Moreover, the most significant rise in quotes occurred at the finish of the working week. Such confident dynamics was provoked by the deterioration of consumer sentiment in the United States. A study released last Friday by the University of Michigan indicated a decline in the index to the lowest level in almost a decade.

This month, the indicator went down by 13.5% (from 81.2 points to 70.2). Economists predicted that in August, the index of consumer sentiment in the United States, on the contrary, will grow and reach 81.3 points.

In the entire history of research, the indicator has only fallen so sharply twice. In the fall of 2008, when the world was experiencing an economic crisis, the index fell by more than 18%. And in the spring of last year, it fell by almost 19.5%, after lockdowns were introduced.

Bloomberg analysts believe that this time the culprit of the fall in the indicator was again COVID-19. Americans are increasingly concerned about the prospects for the economy in the face of inflation and new outbreaks of morbidity.

More infectious and aggressive strains of coronavirus, in particular the delta variant, raise the bar of collective immunity to an impossibly high level. Meanwhile, countries are facing a growing distrust of vaccines and a supply problem.

The publication of the consumer confidence index had a negative impact on the dollar exchange rate and the yield of 10-year US bonds. The dollar sank on Friday by 0.4% against its main competitors, and the yield collapsed from 1.366% to 1.325%.

These factors have fueled the demand for safe-haven assets, which traditionally include gold. The yellow precious metal returned to growth again after the quotes declined during the week amid concerns that the Fed may prematurely start reducing stimulus.

Also, the position of gold was somewhat weakened by the euphoria that prevailed on the American stock markets. Last week, the Dow Jones and S&P-500 indices reached another record highs. Due to the increased interest in risky assets, the demand for reliable ones, on the contrary, has decreased.

Experts draw attention to the fact that now the main driver of growth in the gold market is the deterioration of the epidemiological situation in the world. The incidence of coronavirus is growing. Moreover, the situation is most tense in Asia, where a number of countries continue to record records of daily morbidity.

The sad statistics on COVID-19 helps gold to hold off from stronger losses on Monday. This morning, the quotes are declining correctively after a significant rise in price last Friday.

At the time of publication, the bullion was trading at $1,775.55. Compared to the previous close, they fell by $2.65, or 0.15%.

At the beginning of the week, silver also rushed down. In the morning, the quotes fell by almost 1%, to $23,552, while last Friday they rose by 2.9%. Meanwhile, according to the results of the entire seven-day period, the gray asset lost more than 2% of its value.

This week, investors' attention will be focused on the report on retail sales in the United States, which will be released this Tuesday. Economists expect a decrease in the indicator on a monthly basis by 0.3%.

If the volume of retail sales really falls, it will be another confirmation that the American economy is again under attack due to the coronavirus. This means that the Fed will not change its current course towards tightening in the near future. In the context of a soft monetary policy, gold will continue to strengthen.