Gold prices rise amid growing fears of Omicron

  • 29 November, 2021
  • 5:21 pm EET

Gold prices rose in trading on Monday, amid growing concerns about the impact of the novel coronavirus variable, “Omicron”.

This comes as investors assess whether the emergence of the new mutation may change the hawkish stance of the US Federal Reserve, on interest rates.


Gold Prices Today

The price of gold futures contracts for February delivery increased by 0.55%, to reach the level of $ 1797.90 an ounce.

On the other hand, the price of spot delivery of the yellow metal fell by 0.29%, to record 1797.93 dollars an ounce.

At the same time, the price of silver futures contracts – for March delivery – rose by 1.12%, to $ 23.40 an ounce.

The spot platinum price rose by 1.5%, recording $973.63 an ounce, and the spot palladium price rose by 2.03%, to reach $1801.03 an ounce.


Mutant Omicron

The omicron mutant has spread to a large number of countries in the world; New cases were found in the Netherlands, Denmark and Australia even as more countries imposed travel restrictions; to try to isolate themselves.

The World Health Organization said it was not yet clear whether Omicron, which was first discovered in South Africa, was more transmissible or dangerous than the other variants.

For his part, the chief infectious disease official in the United States, Anthony Fauci, indicated to President Joe Biden, on Sunday, that it would take about two weeks to get definitive information on Omicron.

“Given the uncertainty as to whether this new mutant is more risky than the delta variant, the downside for gold must be protected,” said Harshall Parrott, senior research advisor for South Asia at Metal Fox, adding that gold prices could trade between $1,780 and 1,830. dollars.

Barrott added that while it was too early to gauge whether virus fears have tempered rate hike expectations, there is an upward risk for gold that Omicron will eventually lead the Fed to scale back its stimulus plans and raise rates.


Interest Rates

Atlanta Federal Reserve Chairman Rafael Bostic was the latest of a growing number of policymakers to say he remains open to accelerating the decline in US bank bonds.

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

For her part, European Central Bank President Christine Lagarde said the eurozone is better equipped to counter the economic impact of a new wave of COVID-19 infections or the Omicron variant.

The rise in the price of the dollar limited gold’s gains; The US currency increases the cost of bullion for buyers holding other currencies.

Gold’s retreat from Friday’s peak was partially attributed to sharp declines in platinum and palladium, chief market analyst , Jeffrey Haley.

He said that the inability of gold to rise significantly after recovering, today, Monday, was a negative factor in the movement of gold prices.


Demand For Gold

Japan’s retail sales rose for the first time in 3 months in October, although less than expected, and the underlying private consumption trend pointed to continued pressures on the fragile economic recovery despite the easing of coronavirus restrictions.

The physical demand for gold also rebounded in the main Asian centers, last week, thanks to the decline in prices; Traders in India are bracing for a potential buying spurt as the wedding season picks up pace.





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