We've got news for you.

Register on BusinessLIVE at no cost to receive newsletters, read exclusive articles & more.
Register now

Bengaluru — Gold prices steadied 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 US Federal Reserve’s more hawkish stance.

Spot gold was little changed at $1,792.41 per ounce by 6.46am, while US gold futures advanced 0.4% to $1,792.60.

With new cases of the Omicron variant found in the Netherlands, Denmark and Australia, more countries imposed travel restrictions to try sealing themselves off.

“Given the uncertainty around whether this new variant is more dangerous than the Delta variant and the risk of further restrictions, 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 is 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 US Federal Reserve president Raphael Bostic was the latest among a growing number of Fed officials to say he remains open to accelerating the pace of the central bank’s bond taper.

Reduced stimulus and interest rate hikes tend to push government bond yields up, raising the opportunity cost of gold, which pays no interest.

Countering upbeat triggers for gold, however, the dollar index gained 0.2%, increasing bullion’s cost to buyers holding other currencies.

Physical gold demand picked up in major Asian hubs last week, with dealers in India preparing for a likely spurt in buying as the wedding season gathers pace.

Spot silver rose 1% to $23.35 per ounce. Platinum gained 2.1% to $973.81, while palladium added 2.6% to $1,794.05.



Would you like to comment on this article?
Register (it's quick and free) or sign in now.

Speech Bubbles

Please read our Comment Policy before commenting.

Commenting is subject to our house rules.