ISLAMABAD: Gold prices bounced back on Wednesday as fears over the Omicron variant assist the commodity to gain some positive traction.
Gold in the international market was available at $1,790 per ounce after gaining $14.20 at 1320 hours GMT.
Meanwhile, the price of 10 grams of yellow metal in Pakistan decreased to Rs100,500 after shedding Rs500. Gold in the local market was available at Rs101,000 per 10 grams on Monday last. The decrease in gold value in the local market was due to overnight change in the commodity’s price when the local market was closed as well as appreciation of the Pakistani rupee against the US dollar.
Gold gained some positive traction and staged a goodish rebound from a four-week low, around the $1,770 region touched in the previous day. Concerns about the potential economic fallout from the detection of a new and possibly vaccine-resistant coronavirus variant turned out to be a key factor that benefited the safe-haven gold.
The global risk sentiment, however, stabilized a bit as investors preferred to wait and see if the Omicron variant would eventually derail the economic recovery. This was evident from a generally positive tone around the equity markets, which, in turn, acted as a headwind for the commodity and capped gains.
Apart from this, rising bets for a more aggressive policy tightening by the Federal Reserves next year further collaborated to keep a lid on any meaningful upside for gold prices. The money markets started pricing in the possibility of at least a 50 bps rate hike by the end of 2022. This was reinforced by the ongoing recovery in the US Treasury bond yields, which further held back bulls from placing aggressive bets around the non-yielding yellow metal.
Market participants now look forward to the US economic docket, featuring the ADP report on private-sector employment and ISM Manufacturing PMI. Traders will further take cues from developments surrounding the coronavirus saga and the broader market risk sentiment for some short-term opportunities around gold.