Gold Price Forecast

Gold attracted fresh buying near the $1,780 support zone on the first day of a new week and maintained its bid tone through the early part of the European session. The XAU/USD was last seen hovering near the top end of its daily range, with bulls making a fresh attempt to conquer and build on the momentum beyond the $1,800 mark. Worries about the impact of the possibly vaccine-resistant Omicron coronavirus variant turned out to be a key factor that acted as a tailwind for the safe-haven precious metal.

Meanwhile, expectations that the emergence of a new variant could force the Fed to change its hawkish stance further benefitted the non-yielding yellow metal. Investors, however, preferred to wait and see if the new coronavirus variant would eventually derail the economic recovery. This was evident from the risk-on impulse, which, in turn, could hold back bulls from placing aggressive bets around gold. Apart from this, a stronger US dollar might further cap gains for the dollar-denominated commodity.


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