COVID-19 jitters assisted gold to gain some positive traction on Wednesday

Gold traded with a mild positive bias through the early European session, albeit lacked any follow-through and was last seen hovering around the $1,733-35 region. The XAU/USD, so far, has struggled to capitalize on Monday's rebound from the flash crash to the lowest level since late March and has been oscillating in a range over the past two trading sessions. Concerns about the economic fallout from the fast-spreading Delta variant of the coronavirus extended some support to the safe-haven precious metal.

That said, expectations for an early tapering of the Fed's massive monetary stimulus acted as a headwind for the non-yielding gold and capped the upside. The incoming US macro data, especially Friday's blockbuster NFP report, marked another step towards the Fed's goal of substantial further progress in the labour market recovery. This, in turn, forced investors to bring forward the likely timing for policy tightening. Moreover, the Fed officials have also started to guide the market towards an early tapering of the massive pandemic-era stimulus and higher interest rates as soon as 2022.