Gold Falls to $1,752 - Delta Variant Spread affecting economies

Introduction

Welcome to our Gold news series, where we bring you short and sweet news updates on the global economy and gold market. Today's news discusses the impact of the Delta variant on the US economy.

Delta Variant

The Delta covid-19 variant has impacted the US economy severely in quarter 3 of 2021. Economists and investors alike have expected that the Federal Reserve will push back its announcements of reducing its bond-buying program.
Like most countries that struggle with keeping the coronavirus from spreading, the US economy faces supply chain disruptions that have created inflation.
The US economy still struggles with encouraging its citizens to be vaccinated, as many are sceptical about its effects.
The consensus among economists is that there will be a temporary slowdown in economic growth. The median quarter three growth forecasts reduced to 4.4% compared to its previous second-quarter growth of 6.6%. Reuters poll results anticipate that quarter-four growth rates will be between 5.1% to 5.9%.
Philip Marey, a senior US strategist at Rabobank, said that "if there is going to be much more damage from the Delta (variant) to the economy, then we could see a delay of the taper announcement from November to December or even as late as January".

US Dollar & Gold

On Thursday, the US Dollar climbed to higher ranges against other major currencies as investors and traders look towards next week's Federal Reserve policy meeting on the Taper.
The Dollar Index, measuring the US currency against six others, had an appreciation of 0.3%, reaching 92.743. The strength gained on the dollar combined with the recent inflation data reduces pressure on the upcoming Federal Reserve meeting, indicated by Robert Cobo Garcia, head of FX strategy at BBVA.
Gold lost ground to a month low of $ 1,753/ounce. Strong prints of the US Retail Sales and Philadelphia Fed Manufacturing Index renewed Fed tapering concerns and helped the US Dollar Index to post the strongest daily gains in a month, turning gold prices on a downward trend.
Analysts at TD Securities believes that gold has fallen sharply as central banks have begun slowing their purchases, paring back a binding bid for the market following their recent buying binge.