Gold prices are falling, awaiting the US Federal Reserve’s position to confront Omicron

  • 02 December, 2021
  • 5:47 pm EET

Gold prices fell in trading today, Thursday; Investors are betting that the US Federal Reserve will gradually reduce its bond purchases faster to counter rising inflation.

Investors are also assessing how central banks will respond to rising inflation and concerns about economic growth spurred by the new coronavirus mutant, Omicron.


Gold Prices Today

The price of gold futures contracts – February delivery – decreased by 0.55%, to reach the level of 1774.40 dollars an ounce.

The spot price for the yellow metal also fell by 0.61%, recording $1,770.83 an ounce.

At the same time, the price of silver futures contracts – March delivery – rose by 0.03%, to $22.35 an ounce.

The spot platinum price also rose by 0.31%, recording $940.34 an ounce, and the spot palladium price decreased by 0.22%, reaching $1,753.90 an ounce.

The dollar index maintained its stability and rebounded by 0.4% from the lowest level in the previous session; This increases the cost of gold to buyers holding other currencies.


US Fed Moves

Federal Reserve Chairman Jerome Powell said in Congressional testimony on Wednesday that the bank needs to be prepared to respond to the possibility that inflation does not subside in the second half of 2022.

Powell added that the Federal Reserve would consider reducing its bond purchases faster at its next two-day meeting scheduled to begin on December 14.

Gold is often seen as a hedge against inflation, although lower stimulus and higher interest rates lead to higher government bond yields; This results in a higher opportunity cost of holding bullion, which pays no interest.


Gold Markets

“A more hawkish shift in rhetoric from Powell could overshadow gold any bullish push from the omicron pivot until at least Friday’s non-farm payrolls report,” said Stephen Innes, managing partner at SBI Asset Management.

The US non-farm payrolls report could influence the Fed’s interest rate stance.

On Wednesday, the National Employment Report showed that private payrolls increased by 534,000 jobs in November.



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