Gold prices climbed close to a one-week peak as the significant decline in U.S. consumer sentiment dragged the dollar down to a one-week low. A weaker greenback boosted the bullion’s appeal to investors using rival currencies. The data also alleviated concerns about the Federal Reserve’s earlier-than-expected tapering of economic support.

Spot gold is currently trading at $1,775.85 per ounce as of 0845 GMT.

Preliminary U.S. consumer sentiment declined from 81.2 in July to 70.2 in the first half of August. It is the lowest level since 2011. The survey of current economic conditions dropped from 84.5 to 77.9, and the measure of consumer expectations fell from 79.0 to 65.2.  Americans expressed concerns about personal finances, employment and inflation.

DailyFX strategist Margaret Yang said the disappointing consumer sentiment data gave the Fed more reasons to delay its plan to taper asset purchases. And it is definitely good news for the bullion. She also mentioned that the MACD indicates upward momentum. Yang sees an immediate resistance level at $1,785. Failure to breach that level might send the yellow metal back down to $1,750.

OCBC analysts added that the minutes of the FOMC meeting would determine the next price direction of the bullion.

Another tailwind for gold is the fall of the Afghan government. Taliban militiamen recaptured Afghanistan on Sunday and forced U.S.-based President Ashraf Ghani to leave the country. American diplomatic officials and personnel were also evacuated.

Another factor supporting the bullion is the surge in Delta variant infections. The number of children hospitalized due to COVID-19 reached a record of 1,902 on Saturday. The hospitalization of 18-49 Americans also hit a historic peak last week.

Gold is considered a safe-haven asset in times of economic and political uncertainty.

In physical trading, gold demand in Asia improved from a price decline that sent premiums to multi-month highs in the two consumers in the world. Dealers in India charged up to $5 per ounce, the highest level in five months. In China, premiums rose to $5-10, the highest since early June.

In a related development, the holdings of the largest gold-backed exchange-traded fund in the world, SPDR Gold Trust, fell 0.1% from 1,023.54 on Thursday to 1,021.79 on Friday. The U.S. Commodity Futures Trading Commissioned reported that market speculators reduced their net long positions in COMEX gold contracts for the week that ended on August 10.