Peru’s small miners block highways, camp outside Congress demanding registry extension
Analyst says that there are strong competing interests between Congress and small-scale miners that could escalate.
The gold edged higher on Wednesday, supported by declines in the dollar and worries over the fast-spreading omicron variant, though trading was range-bound as investors await the minutes of the US Federal Reserve’s latest policy meeting.
Spot gold rose 0.5% to $1,824.75 an ounce by 11:50 a.m. EDT, erasing its loss from earlier this week and returning to a five-week high. US gold futures also gained 0.5%, trading at $1,823.80 an ounce in New York.
[Click here for an interactive chart of gold prices]
Meanwhile, the US dollar eased by 0.3%, making bullion an attractive bet for overseas buyers. Benchmark 10-year Treasury yields were also slightly lower after rising to their highest level in more than a month.
Further boosting gold’s appeal was a subdued risk appetite in equity markets, with Wall Street’s main indexes opening lower, weighed by technology stocks.
“Supporting gold is the very high number of covid cases that feeds into the gold safe-haven appeal,” Ricardo Evangelista, senior analyst at ActivTrades, told Reuters.
“The factor offering gold some resistance is the strength of the dollar and the likelihood that the dollar could get even stronger because of the Fed’s tightening monetary policy,” he added.
Markets are awaiting the Fed’s minutes of its December 14-15 policy meeting, due 2 p.m. EDT, which could provide clues on the US central bank’s plan on rate hikes and tapering of its pandemic-era stimulus to subdue the surging inflation seen over the past six months.
“Price inflation that becomes problematic is bullish for hard assets like the raw commodities, including the precious metal. And with some of the inflation worries starting to resurface, that’s inviting some buying interest in the safe haven gold market,” said Jim Wyckoff, a senior analyst at Kitco Metals.
Gold prices are firming despite the market pricing of a 70% probability for a Fed rate hike in March, as appetite for safe-havens grow amid soaring infections, rising rates and wobbly equity prices, TD Securities wrote in a note.
Earlier in the day, Goldman Sachs said in a note that cryptocurrency Bitcoin will take market share away from gold in 2022 as digital assets become more widely adopted.
(With files from Reuters)
