Gold Prices Struggle Even as Markets Convulse Amid Omicron Fears

As the global economy continues to suffer from a slew of uncertainties, investors are turning to gold as a safe haven. In addition to its traditional store of value, gold yields nothing, and the world has been reeling from a recent outbreak of COVID-19. Moreover, the latest news from the World Health Organization indicates that a new variant of the virus has been discovered.

Although Democrats gained control of the House, investors were concerned that the country was heading for a prolonged period of gridlock. The incoming administration of President Obama sounded positive about reducing stimulus and raising interest rates, but it also raised the cost of gold to foreign buyers. Furthermore, the weakened dollar made gold more expensive to foreign investors. But the price of gold is still down 1.8 per cent this week.

On top of that, a dovish Fed chairman’s stance has spooked investors, which is good news for gold. Meanwhile, the dollar has lost ground, and gold prices have fallen below $1760 an ounce. The US currency also weakened against the euro, which weakened its purchasing power. This means that gold prices could surge higher in the short term.

As a result, the dollar has become stronger, causing investors to panic. In London, industrial metals fell nearly three per cent. Among the biggest losers are gold and platinum. Nevertheless, the softer dollar is offset by concerns about a new Omicron variant that could derail the growth of one of the world’s leading industrial economies.

The price of gold in Pakistan is up by Rs1,000 a tola. On the other hand, the international market has risen by Rs1,000 an ounce. Similarly, 24k gold prices in the international market have climbed by around 2%. ForexTV 2021 is copyrighted and licensed under the Creative Commons license. All rights reserved.