Gold gains ground due to increased omicron fears and inflation

Stock image of gold bars in the vault of the National Bank of Kazakhstan in Almaty, Kazakhstan. September 30, 2016. REUTERS / Mariya Gordeyeva

Por Ashitha Shivaprasad

Dec 17 (Reuters) – Gold topped $ 1,800 on Friday and was heading for its first weekly gain in five as concerns over the omicron spread and inflation prompted investors to seek safe haven assets.

* Spot gold was up 0.3% to $ 1,804.78 an ounce as of 1601 GMT, bringing its rise so far this week to 1.2%. Gold futures in the United States were up 0.5% at $ 1,807.30.

* Stocks were down across the board, following a shift by global central banks to control mounting price pressures and economic risk posed by rising COVID-19 cases.

* “Growth is going to slow in the next quarter, and US equities are correcting from their highs, so there appears to be a panic to move out of equities into safe assets like gold and silver,” Phillip said. Streible, chief market strategist at Blue Line Futures in Chicago.

* The Federal Reserve on Wednesday anticipated three interest rate hikes for the end of 2022, a move that would normally have weighed on gold as higher rates increase the opportunity cost of non-yielding bullion.

* However, the metal rose because the prospects for rate hikes had been discounted before the central bank’s announcement, according to analysts.

* Inflation also cushioned pressure from the Federal Reserve’s aggressive stance, ANZ analysts said in a note.

* Gold gains occurred despite inflows to the dollar, also considered a safe store of value during geopolitical uncertainties.

* Palladium advanced 3.1% to $ 1,783.47, while silver gained 0.2% to $ 22.51. Platinum rose 0.5% to $ 941.04

(Report by Seher Dareen in Bengaluru Edited in Spanish by Ricardo Figueroa)

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