Business Maverick

Business Maverick

Gold Steady as Investors Weigh Policy Outlook, Omicron Risks

Bloomberg Best of the Year 2021: A worker loads 12,5 kilogram gold ingots onto a trolley ready for distribution at the JSC Krastsvetmet non-ferrous metals plant in Krasnoyarsk, Russia, on Monday, July 12, 2021. Photographer: Andrey Rudakov/Bloomberg

Gold was steady as investors weighed the outlook for monetary policy against the risks posed by the omicron virus variant to the global economic recovery. 

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.

While the Bank of Japan is seen sitting tight on policy while adjusting its view of inflation risks Tuesday, Governor Haruhiko Kuroda is expected to emphasize his commitment to continued easing in pursuit of the bank’s distant price target.

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.


Comments - Please in order to comment.

Please peer review 3 community comments before your comment can be posted


This article is free to read.

Sign up for free or sign in to continue reading.

Unlike our competitors, we don’t force you to pay to read the news but we do need your email address to make your experience better.

Nearly there! Create a password to finish signing up with us:

Please enter your password or get a sign in link if you’ve forgotten

Open Sesame! Thanks for signing up.