Gold re-attempts the upside above $1,800 amid risk-aversion.Omicron fears, US fiscal worries sap investors’ confidence.Gold bulls will keep targeting strong resistance around $1,815.Despite the extended rally to three-week highs of $1,814, gold price closed Friday in the red, as the bulls failed to sustain at higher levels. The bright metal booked the first weekly gains in five weeks, finishing below the $1,800 mark. A week full of hawkish monetary policy decisions by some of the major central banks, including the Fed and BOE, spurred a renewed upside in the gold price. The persistent weakness in the US Treasury yields amid expectations that the hawkish Fed shift will help alleviate inflation pressures, underpinned the non-yielding gold. However, the rally lost legs on Friday after the US dollar jumped on the back of short-covering. Investors looked to close out their trades, as the final full week of 2021 drew to an end. Also, the Omicron covid variant fears-driven Wall Street tumble also aided the greenback’s turnaround.
Gold price has kicked off the Christmas week on the right footing, regaining the $1,800 level, despite the US dollar’s upside consolidative mode. Risk-aversion remains the main underlying theme so far this Monday, as investors weigh in the weekend blow received from US Senator Joe Manchin. The conservative Democrat said he won’t support President Joe Biden administration’s “Build Back Better” plan, killing hopes for the $1.75 trillion huge fiscal spending. In light of Manchin’s comments, Goldman Sachs downgraded US GDP forecasts, which further fuelled the risk-off flows, as Netherland’s Omicron lockdowns added to the market’s pain. Surging Omicron cases in the UK and Europe keep investors on the edge, benefiting the traditional safe-haven gold.
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