Gold rebounds as Omicron concerns brighten investors’ appetite
GOLD SURMOUNTED BEARISH PROJEC TIONS TO RECORD A SIGNIFICANT RISE AS THE CO VID19 OMICRON variant and the crisis of confidence it has spawned in the global recovery from the pandemic, appears to have strengthened demand for the precious metal.
Prior to the positive result at the final day of the week’s trading, expectations had been bleak all week for gold to collapse into the $1,600 territory after Jerome Powell, the Federal Reserve Chair announced his willingness for the central bank to speed up the taper of its pandemic-era stimulus, and have a U.S. rate hike faster than originally thought.
However, concerns about the Omicron’s potential impact on the U.S and the global community, fuelled safe-haven buying in gold. This, analysts averred, supported gold towards hovering above $1,700.
U.S. gold futures’ most active contract, December, settled up $21.20, or 1.2 per cent, at $1,783.90 an ounce. Prices however posted a 0.2 per cent loss for the week after trading at their lowest in over seven weeks the previous day.
Gold’s rebound also came on the back of the collapse of the 10-year Treasury yield, which fell more than 6 per cent following a disappointing U.S non-farm payroll report as nonfarm payrolls increased by just 210,000 for November, compared to expectations of a rise of 550,000increased for the month to 61.8%, its highest level since March 2020.
Commenting on gold’s resilience, Phillip Streible, precious metals strategist at Blueline Futures in Chicago noted that it is odd that gold didn’t melt down on the Fed’s threat for a quick taper or rate hike, and instead coasted on the bigger worry associated with the Omicron.