Gold prices rise amid fears that Omicron will not respond to Corona vaccines

  • 30 November, 2021
  • 5:34 pm EET

Gold prices rose in trading on Tuesday, with increasing fears of the expansion of closures and restrictions due to the spread of the new Corona virus, Omicron.

The price increase comes after the president of Moderna Pharmaceuticals warned that coronavirus vaccines are unlikely to be as effective against the Omicron mutant, as they were against the Delta version.


Gold Prices Today

The price of gold futures contracts for February delivery increased by 0.60%, to reach the level of $ 1795.90 an ounce.

And the spot price for the yellow metal rose by 0.58%, recording $1,794.94 an ounce.

At the same time, the price of silver futures contracts – March delivery – rose by 0.56%, to $22.98 an ounce.

While the spot platinum price declined by 1.2%, recording $954.77 an ounce, and the spot palladium price decreased by 0.04%, to reach $1795.33 an ounce.


Mutant Omicron

Moderna’s president’s comments rocked financial markets, with Asian shares tumbling to their lowest levels in more than a month, while crude oil futures fell more than 2%.

“It is difficult to say how the omicron mutation will ultimately affect gold, as markets are still digesting the comments,” said Michael Hewson, chief market analyst at CMC Markets.

He added that gold prices may return to the level of 1800 dollars if the stock markets decline.


US Federal

Investors will be paying close attention to US Federal Reserve Chairman Jerome Powell’s testimony before Congress later this week.

Powell warned Monday that the new strain of coronavirus has reversed inflation expectations at the US central bank, and that prices may continue to rise for longer than previously thought.

“Powell has a penchant for calming markets and may hint that the Fed is willing to slow the pace of withdrawal of stimulus, providing some support for gold,” said Ilya Spivak, currency strategist at DailyForex.

“However, it is unlikely that any rise in gold prices will continue, because we still do not know the tolerance of the Omicron mutant to vaccines yet,” he added.

A large number of countries have imposed travel restrictions to curb the spread of the newly discovered omicron mutant, which the World Health Organization said on Monday has an extremely high risk of infection.

He noted that so far there is one comment from one person, albeit significant, and the Fed needs more clarity before committing to slow the taper.


Gold Market Forecast

Spivak explained that if the Fed were to focus more on growth and less on inflation, that should lift gold, but if Friday’s payroll data shows softer hiring and stronger wages, that could cast a shadow over the Fed’s policy outlook, and a lack of This certainty will ultimately lead to the strengthening of the dollar at the expense of gold.”

The yield on the 10-year Treasury Inflation-Protected Treasury has recovered from a record low earlier in the month, however, it remains in negative territory, at -1.05% on Tuesday, keeping the opportunity cost of gold low.

Lower stimulus and higher interest rates tend to push up government bond yields, raising the opportunity cost of gold, which pays no interest.






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