How big is the Delta variant risk? Here’s how gold price reacts – by Anna Golubova (Kitco News – August 4, 2021)

(Kitco News) The risk of the Delta variant is starting to dominate the headlines, with some analysts raising concern about the surge of COVID-19 cases, potential shutdowns, and slower economic growth in the second quarter of the year. But what will it mean for gold?

The highly contagious strain of the COVID-19 virus is starting to worry the markets, especially after the Infectious Diseases Society of America said Tuesday that the spread of the Delta variant had upped the herd immunity threshold close to 90% from the previous estimates of about 60%.

These new projections could be problematic for the U.S., which only has about 50% of the population fully vaccinated, according to the CDC. The global Delta risk is growing by the minute, but now the focus shifts to the U.S.

“The U.S.—and thus financial markets—now cares as rates are spiking and it’s receiving ongoing (U.S.) media coverage,” said MKS PAMP Group head of metals strategy Nicky Shiels. “There’s increasing more data of breakthrough cases where vaccinated people are getting infected (including key politicians). [And] lockdowns, masks and mandates are being brought back into the conversation.”

Despite the risk, this is more likely to trigger more money printing and a more accommodative Federal Reserve than lead to extreme lockdowns.

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