Gold prices firmer, omicron unleashes increased interest in safe haven assets

Gold traded near US $ 1,800 on Monday amid fears of risks to the world economy from the variant of the omicron coronavirus, amid expectations of a more moderate approach to monetary policy from the Federal Reserve.

At 1019 GMT, spot gold was up 0.3% to $ 1,796.53 an ounce, while US gold futures were up 0.7% to $ 1,797.50.

While gold is back at around $ 1,800, it is expected to remain volatile with omicron a key factor, according to Ole Hansen, an analyst at Saxo Bank.

“If the virus raises new concerns about economic activity, central banks will find themselves between a rock and a hard place because inflation will not give way (…), but growth will, and that leaves them in a very precarious situation”He added.

With new cases of the omicron variant found in the Netherlands, Denmark and Australia, more countries imposed travel restrictions.

Bullion’s advance was limited by the rise in the dollar, which made raw materials more expensive for holders of other currencies. Stock markets, meanwhile, showed some recovery after last week’s crashes.

Gold was also aware of the timeframes in which the Fed could raise interest costs in the United States. Higher rates in that country translate into a higher opportunity cost of holding bullion, which does not earn interest.

Silver was up 0.7% at $ 23.30 an ounce. Platinum was up 1.4% at $ 966.99 and palladium was up 2.2% at $ 1,787.04.