Gold prices soared as investors sought safe haven again after the CEO of Moderna warned that COVID-19 vaccines would be less effective against the Omicron variant and put gold on course for a second consecutive monthly gain. So, what levels are next? Cryptocoin. com we share the comments of 2 analysts…
Moderna CEO’s comments were influential for gold prices
The comments of the president of Moderna shook the financial markets and led to the decline in European stocks. The U.S. dollar index fell 0.6 percent to help boost gold, while yields on U.S. 10-year Treasuries hit a three-week low. “While investors and portfolio managers are still assessing the potential risk of the Omicron coronavirus variant, the risk-off sentiment is gaining momentum again,” said Kinesis Money external analyst Carlo Alberto De Casa. “Investors are betting that this could slow the Fed’s tapering,” De Casa said. Therefore, the US dollar is losing ground and the scenario is supportive for gold,” he said.
Gold tends to benefit from stimulus measures as it increases the probability of inflation, where bullion is used as a hedge, but interest rate increases increase the opportunity cost of holding gold. Fed Chairman Jerome warned on Monday that the new strain of COVID-19 is clouding the central bank’s inflation outlook and that prices could continue to rise longer than thought. Commerzbank analyst Daniel Briesemann said gold could still head towards $1,900 by the end of the year due to renewed economic concerns, and silver could watch gold’s gains. At the time of writing, an ounce of gold is changing hands at $1,781.