Gold hits weeklong high as Omicron worries about firmer dollar

  • Palladium hits its highest level in a month
  • Optimistic gold outlook for the first quarter of 2022 – analyst

December 27 (Reuters) – Gold prices peaked more than a week on Monday, as renewed risks to global economic growth from increasing cases of the Omicron coronavirus variant offset the pressure from a firmer US dollar.

Spot gold was flat at $ 1,807.50 an ounce as of 1:39 pm EDT (1839 GMT), after hitting its highest level since Dec. 17 at $ 1,813.38 earlier in the session.

US gold futures were down 0.2% to $ 1,808.80 an ounce.

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The outlook for gold in the first quarter of 2022 is optimistic, with the main driver being inflation, which is keeping prices bottoming, said Jim Wyckoff, senior analyst at Kitco Metals.

“The underlying support comes from the inflation issues,” Wyckoff said, adding that “the Fed’s penchant for a little tighter monetary policy seems to have calmed gold traders a bit.”

Non-performing bullion is often seen as a hedge against higher inflation.

The dollar index (.DXY) fell from its lowest level in almost a week, making gold at the greenback price less attractive to holders of currencies other than the United States.

“Although there is a firmer US dollar, there is not much movement in gold today,” said Peter Fertig, analyst at Quantitative Commodity Research, adding that one of the main reasons from the lack of liquidity is the closing of the markets at Christmas.

Higher yields increase the opportunity cost of holding gold, which weighs a bit on gold prices, Fertig added.

While generally calm this week, “low liquidity makes headline sensitivity more pronounced as weak markets are likely to make price action more choppy if something were to happen,” the strategist said. in DailyFX currency, Ilya Spivak.

Silver was unchanged at $ 22.94 an ounce, while platinum fell 0.7% to $ 967.43.

Palladium rose 0.1% to $ 1,950.24 an ounce, reaching its highest level since November 22 earlier today.

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Reporting by Kavya Guduru, Bharat Govind Gautam and Seher Dareen in Bengaluru; Additional reporting by Ashitha Shivaprasad; Editing by Uttaresh.V, Alison Williams and Shinjini Ganguli

Our Standards: Thomson Reuters Trust Principles.

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