The new COVID-19 strain has left a negative imprint on Christmas this year, helping gold in post-holiday trading in Asia. On Monday morning, the metal started to rise.
Last week, which was shortened due to the celebration of Christmas, the precious metal closed with a rise of 0.4%. The quotes were mainly supported by the growing fears about the spread of the Omicron strain.
On Monday, investors remained concerned that a new variant of the coronavirus could slow the global economic recovery. The degree of panic in the market is raised by disappointing statistics.
It should be noted that the average number of new coronavirus patients in the US last week rose 45%, namely to 179,000 per day. In addition, the UK and France are reporting a new daily high of COVID-19 cases. In these countries, the figure exceeded 122 thousand and 94 thousand, respectively.
The surge in morbidity has led to additional restrictions on Christmas, when travel has traditionally been increasing. To reduce the spread of the virus, commercial airlines around the world canceled more than 4,500 flights over the holiday weekend.
In view of this, the US dollar and the yield on US Treasuries began the new trading week on a minor note. Earlier, the index of the US currency declined by 0.08%, reporting to 96.10 points. At the same time, the yield fell to 1.482%, retreating from the 2-week high reached the day before.
The weakening US dollar and falling yields allowed gold to rise to $1,812.
The tense geopolitical situation also contributed to the upward dynamics of precious metals on Monday morning.
On the other hand, analysts call optimistic data on US retail sales during the holiday shopping season as among the negative factors that are holding back gold’s growth. According to the MasterCard report, the indicator increased by 8.5% from November 1 to December 24.
In addition, a current potential danger for the yellow asset is the prospect of adopting the plan of US President Joe Biden. According to experts, any comments on the approval of this bill may put downward pressure on gold quotes in the near future, while on the contrary, the demand for risky assets will grow.
In general, analysts are confident that this week’s trading of gold will be weak and limited by a narrow price range because it is currently impossible to single out any particularly powerful trigger among the contradictory factors that are present in the precious metal market.
Experts suggest that a stronger price fluctuation on the current seven-day period is likely to be caused by the publication of the Federal Reserve Bank of Dallas production index for December. Economists expect an increase to 13.2 from the 11.8 achieved last month.
The material has been provided by InstaForex Company – www.instaforex.com