* US 10-year yields hit five-month low
* Reduced risk sentiment helps gold – analyst
* Dollar businesses near multi-month highs (price updates)
July 20 (Reuters) – Gold prices soared on Tuesday amid concerns over economic damage from soaring cases of the Delta coronavirus, and lower U.S. Treasury yields have bolstered the safe-haven metal’s appeal .
Spot gold rose 0.6% to $ 1,823.06 an ounce at 1254 GMT, after hitting a low of $ 1,794.06 in the previous session. US gold futures gained 0.8% to $ 1,824.20.
“The big problem right now is the fear of the economic impact of the Delta variant of the coronavirus and after Japan took tough action on the Olympics, the markets became more and more nervous, leading to a flight to shelters. “said Quantitative Commodity Research. analyst Peter Fertig.
An increase in coronavirus cases in the United States and other countries has sent higher risk assets such as stocks and falling oil.
Tokyo Olympics organizers reported the first cases of COVID-19 among athletes’ village competitors on Sunday.
Gold, viewed as a safe store of value, tends to benefit in times of political and financial uncertainty.
“The rapid increase in cases in Europe as well as the United States has prompted market participants to reduce risk in their portfolios,” said Carsten Menke, analyst at Julius Baer.
Benchmark 10-year Treasury yields hit a more than five-month low, reducing the opportunity cost of holding non-interest-bearing gold.
A firm US dollar challenged gold’s appeal, however, as the currency hit a 3.5-month high, making gold more expensive for other currency holders.
Commerzbank said in a note that the recent weakness in gold is likely to be only temporary and will recover significantly as soon as the headwind of an appreciating dollar eases.
Elsewhere, platinum fell 0.7% to $ 1,067.49 an ounce, palladium edged down 0.1% to $ 2,594.31, and silver fell 0.4% to 25 , $ 12. (Reporting by Arundhati Sarkar in Bengaluru, edited by Mark Potter, Jane Merriman and David Evans)