Gold Shows Gains Despite Omicron Risk

Gold Shows Gains Despite Omicron Risk

The price of gold bullion rose for the first time since mid-November as investors responded to tightening monetary policy and the threat of Omicron by making safe-haven investments in the commodity.

Market analysts had warned that risk aversion would take hold of financial markets, with more countries introducing restrictions to fight the surge of Omicron.

Spot gold was trading at $1,796.85 an ounce, after climbing 0.9% last week. The Bloomberg Dollar Spot Index was steady after advancing 0.6% Friday. 

While bullion showed a weekly gain despite fears over Omicron, the price of gold is still heading for its first annual loss in three years as central banks take a firmer role in fighting inflation. It is expected that lower trading over the end-of-year period will keep prices within a range of  $1,780 to $1,800 an ounce.

What does this mean for me?

Investors have been buying more gold to hedge against rising inflation and the slowdown that Omicron might enforce on global markets.

As a commodities trader, you will come to learn that metals like gold, silver, and platinum are viewed as safe-haven investments. Many traders are quick to invest in these commodities for their relative stability whenever global headwinds start to blow.

Now might be the time to revisit your commodities portfolio as the picture of the major trends that will shape Q1 2022 emerges. High inflation, virus restrictions, and high consumer prices are likely to endure into next year.

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