The Federal Reserve is likely to raise interest rates in March, with officials saying they may need to implement hikes faster than expected to curb the hottest inflation since the 1980s. Meanwhile, traders are reconsidering an earlier kickoff for the first European Central Bank rate increase in more than a decade.
On the virus front, President Joe Biden’s chief medical adviser on the pandemic Anthony Fauci said it’s too soon to know whether the rapid spread of the new variant will hasten the end of the health crisis.
Gold is holding above $1,800 an ounce after dropping for the first time in three years in 2021 amid the prospects of monetary policy tightening and the deployment of vaccines. Still, bullion’s traditional role as an inflation hedge and the uncertainty over omicron’s impact is supporting demand for the haven asset.
Spot gold was little changed at $1,819.08 an ounce by 8:03 a.m. in Singapore, after rising 0.1% Monday. The Bloomberg Dollar Spot Index was steady after adding 0.1% in the previous session. Silver and palladium were flat, while platinum advanced.