Gold prices rose nearly 1 percent on Friday as uncertainty induced by the Omicron coronavirus variant and slump in US Treasury yields boosted the safe-haven metal’s appeal. So, what do analysts say about this situation? Here are the comments of the Oanda analyst…
Oanda analyst: Gold capitalizes on current environment
According to Edward Moya, senior market analyst at OANDA brokerage firm, gold is benefiting from a safe-haven escape as both Delta and Omicron variants pose a risk to the short-term growth outlook, as investors accelerate the Fed’s bond-buying plan and are concerned about the COVID situation.
“Gold’s weekend performance is significant as it aligns with the Fed’s rate-cutting effort with high expectations for faster contraction,” Moya said. Meanwhile, the US 10-year bond yield fell below 1.4 percent for the first time since September, reducing the opportunity cost of holding interest-free gold. However cryptocoin.com As we reported, gold was on track to record its third consecutive weekly loss, down 0.4% as Fed officials took a hawkish tone on stimulus cuts and interest rates.
Data on Friday showed US job growth slowed significantly in November, but the unemployment rate fell to a 21-month low of 4.2 percent, showing the labor market tightening rapidly. As Fed policymakers react to the tightening labor market and move to open the door to rate hikes sooner than they anticipated, it looks like they’ll ramp up their bond-buying programs when they come together later this month, according to experts.
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