Make Kitco Your Homepage

Gold hovers below one-week peak as dollar ticks higher

Kitco News

* Fed minutes due on Wednesday

* Geopolitics a focus as Taliban seize Afghanistan

* Platinum and palladium down more than 1% (Updates prices)

Aug 16 (Reuters) - Gold prices edged lower on Monday as the dollar held steady, although receding worries about early tapering by the U.S. Federal Reserve and concerns over the coronavirus Delta variant kept bullion near a one-week peak.

Spot gold was down 0.3% at $1,774 per ounce by 1102 GMT after hitting its highest since Aug. 6 at $1,782.40 earlier in the session. U.S. gold futures fell 0.1% to $1,776.70.

The U.S. dollar rose 0.1% against major peers, buoyed by disappointing monthly activity data from China.

"We're just seeing a small reversal in gold prices after a strong rally on Friday, which is probably quite natural, also considering the fact that the dollar is a bit stronger," Saxo Bank analyst Ole Hansen said.

"The market may have started to readjust after weak sentiment data going into the Fed minutes and Jackson Hole. But right now, we're in a period of consolidation between $1,750 support to the downside and $1,790 being the upside."

Gold jumped 1.5% on Friday after data showed U.S. consumer sentiment dropped sharply in early August to its lowest in a decade, soothing fears among investors that the Fed has been getting closer to a decision about when to reduce its stimulus.

The focus now shifts to minutes of the Fed's July meeting due to be released on Wednesday and Chair Jerome Powell's comments on Tuesday that could shed more light on U.S. monetary policy.

Markets are also keeping a close watch on geopolitical implications due to a sudden collapse of the Afghan government after Taliban insurgents seized the capital Kabul.

"Over the weekend, the political situation in Afghanistan deteriorated drastically ... this might potentially affect the financial markets and the gold price, which we will find out over the next few days," said Carlo Alberto De Casa, market analyst at Kinesis.

Gold is often used as a safe store of value during political and financial uncertainty.

Silver fell 1% to $23.50 per ounce. Platinum slipped 1.5% to $1,011 and palladium dropped 1.1% to $2,621.72. (Reporting by Brijesh Patel in Bengaluru; Editing by Mark Heinrich and David Clarke)

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.