PRECIOUS-Gold eases one-week high as dollar gains the upper hand

* Retail sales in the United States fell 1.1% in July

* Money peaks for more than a week

* 10-year bond yields at their lowest for nearly two weeks (overhaul, addition of comments, price update)

Aug. 17 (Reuters) – Gold prices retreated from a peak of more than a week on Tuesday as some investors switched to the dollar instead as the surge in cases of the COVID-19 variant Delta threatened the global economic recovery.

Spot gold fell 0.1% to $ 1,785.48 an ounce at 2:32 p.m. GMT. US gold futures fell 0.2% to $ 1,785.80 an ounce.

“Gold is very sensitive to any type of dollar movement and with the dollar strengthening it adds some pressure on metals,” said Daniel Pavilonis, senior market strategist at RJO Futures.

The dollar index jumped 0.4% against its rivals, making gold more expensive for other currency holders.

Risk sentiment in broader financial markets remained low as disappointing US retail sales data and a spike in COVID-19 infections around the world dampened appetite for riskier assets .

Giving gold some breathing space, benchmark 10-year Treasury yields fell to a nearly two-week low, translating into a reduction in the opportunity cost of holding non-interest-bearing gold. .

“US Treasury yields provide a bit of a hedge for gold, and we’re seeing a higher probability of inflation without rising interest rates,” Pavilonis said.

Market attention now turns to the minutes of the Federal Reserve’s July meeting scheduled for Wednesday for clues that the central bank stimulus is waning. The markets are also watching closely the growing geopolitical implications in Afghanistan.

“Events in Afghanistan don’t usually displace gold, but the Taliban’s swift and seemingly complete victory can indirectly support ‘safe-haven’ assets like bullion, even if only modestly,” HSBC said in a note.

“The impact on gold may be greater than initially imagined.”

Gold is considered a safe store of value in times of political and financial uncertainty.

Elsewhere, silver fell 0.6% to $ 23.69 an ounce, after hitting its highest level since Aug. 9 at $ 23.95.

Platinum lost 1.3% to $ 1,009.44 and palladium lost 2.3% to $ 2,546.53. (Reporting by Arundhati Sarkar in Bengaluru; editing by David Evans)