Gold rises as Omicron fears offset strength in dollar
Gold prices edged higher on Monday as concerns over the impact of the Omicron coronavirus variant offset a stronger dollar, with investors assessing whether the emergence of the variant could change the U.S. Federal Reserve’s hawkish stance.
Spot gold rose 0.2% to $1,794.87 per ounce by 0646 GMT, while U.S. gold futures advanced 0.5% to $1,794.20.
With new cases of the Omicron variant found in the Netherlands, Denmark and Australia, more countries imposed travel restrictions to try to seal themselves off.
“Given the uncertainty around whether this new variant is more dangerous than the Delta variant, gold’s downside should be protected,” Harshal Barot, a senior research consultant for South Asia at Metals Focus, said, adding that it could trade between $1,780 and $1,830.
Barot also said while it was too soon to gauge if virus concerns have eased rate hike expectations, there is an upside risk for gold that the variant eventually leads the Fed to scale back on its stimulus tapering and rate rise plans.
Atlanta U.S. Fed President Raphael Bostic was the latest among a growing number of policymakers to say he remained open to accelerating the pace of the central bank’s bond taper.
