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In the meantime, the greenback index rose from its weakest stage in almost every week, which makes the greenback-priced gold much less engaging for holders of non-US currencies.
Nonetheless, the outlook for gold within the first quarter of 2022 is upbeat, with the principle driver being inflation, which is maintaining a flooring beneath costs, Jim Wyckoff, a senior analyst at Kitco Metals, told Reuters.
“The underlying help comes from inflation considerations,” Wyckoff stated, including “the leanings of the Fed for just a little bit tighter financial coverage appears to have assuaged the gold merchants just a little bit.”
“Whereas there’s a firmer US greenback, there isn’t numerous motion in gold in the present day,” stated Quantitative Commodity Analysis analyst Peter Fertig, including that one of many predominant causes for the shortage of liquidity is closed markets over Christmas.
“Barely increased yields improve the chance price for holding gold, which is weighing just a little on gold costs,” Fertig added.
“Though quiet total this week, the low liquidity makes headline sensitivity extra pronounced, as the skinny markets are prone to make for extra jittery value motion if one thing have been to occur,” stated DailyFX forex strategist Ilya Spivak.
(With recordsdata from Reuters)