* Recovering physical gold should support gold prices -analyst
* U.S. consumer sentiment hits decade low in early August (Updates prices)
Aug 13 (Reuters) - Gold rose more than 1% on Friday after a survey showing that U.S. consumer sentiment dived in early August calmed investor concerns over an early tapering of the Federal Reserve’s asset purchases.
Spot gold rose 1.4% to $1,776.21 per ounce by 1:44 p.m. EDT (1744 GMT). U.S. gold futures settled 1.5% up at $1,778.20.
The precious metal has recovered sharply after sliding to an over four-month low on Monday that was spurred by fears the Federal Reserve would begin cutting back economic support after a strong U.S. jobs report last week.
“The crash in gold was a little overdone and we’re beginning to see the reality that economic stimulus in the U.S. and worldwide is going to continue,” Jeffrey Sica, CEO of Circle Squared Alternative Investments.
In a sign of the potential economic impact of the fast-spreading Delta COVID-19 variant, the University of Michigan’s preliminary consumer sentiment index was at a decade low in early August.
The dollar and U.S. benchmark 10-year treasury yields also weakened after the survey, bolstering the appeal of gold, which is non yield-bearing and becomes cheaper for holders of other currencies when the dollar falls.
Providing further support to bullion was increased physical demand, particularly from top consumers India and China.
“The hope is that India’s demand recovery in particular is going to be a sustainable trend, keeping gold prices from breaking significantly lower,” said TD Securities commodity strategist Daniel Ghali.
Elsewhere, silver rose 2.4% to $23.72 per ounce.
Silver could move higher in step with gold, especially given supply constraints in the physical gold market, Circle Squared’s Sica added.
Platinum rose 1% to $1,028.65 and palladium was up 1.2% at $2,654.76.
TD’s Ghali also said there was a possibility of significant substitution of palladium with platinum in automobile exhaust systems to curb emissions, potentially boosting platinum demand from 2022. (Reporting by Nakul Iyer in Bengaluru; Editing by Anil D’Silva, David Evans and Barbara Lewis)
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