A wave of risk aversion swept across financial markets on Thursday thanks to economic and coronavirus related jitters.

European stocks were painted red, tracking the selloff in Asia as market players scattered from riskier assets to safe-haven destinations. Wall Street opened sharply lower amid the risk-off mood with creeping doubts over the health of the global economic recovery leaving investors on edge. Indeed, the rapid spread of the Delta variant has set off alarm bells across the world, especially after the global death toll from Covid-19 surpassed 4 million. Investors are clearly not in a cheerful mood given the global growth fears and this may weigh on equity markets for the remainder of the week.

Commodity spotlight – Gold

The rally in gold prices continued on Thursday thanks to a weaker dollar and falling Treasury yields.

After depreciating over 7% in June, the precious metal has gained over 2.5% month-to-date and is trading above $1800 as of writing. Gold bugs continue to derive strength from subdued treasury yields, global growth concerns and fears over the Covid-19 variants.

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Looking at the technical picture, the breakout and daily close above the $1800 resistance level could signal a move towards $1825. Bulls may face some resistance beyond here given how the 50-day and 200-day SMA reside above this region. However, if gold bugs overcome this barrier, they may be able to challenge $1842, with the next key points of interest found at $1870 and $1900.

Alternatively, a move back below $1800 could result in a decline towards $1794. Sustained weakness under this level opens a path towards $1760 and $1735.

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