gold price

Based on Bloomberg data, the most active gold contract for February 2022 delivery on the Comex New York Exchange weakened 0.27 percent or 4.8 points to US$1,789.80 per troy ounce at 08.29 WIB. On the other hand, the price of gold in the spot market rose slightly by 0.09 points to a level of US$1,791.02 per troy ounce.

Gold prices previously weakened as investors anticipated plans to increase benchmark interest rates in 2022 and measure the impact of soaring cases of the omicron variant of the corona virus on the economy.

Comex gold fell 10.3 points, or 0.57 percent on Monday to as low as US $ 1,794.60. Investors spent the day selling the precious metal to hedge positions in anticipation of the Federal Reserve's three rate hikes in 2022.

Market analysts also attributed the lack of impetus to shrinking liquidity in the market ahead of the holiday, rather than a purely bearish stance on the precious metal.

Global equities also retreated on concerns over the impact of tighter Covid-19 restrictions, but inflows into safe-haven gold appear to have stalled. Nevertheless, gold found little support from a lower dollar.

This is in contrast to Friday (17/12), when worries triggered by omicron pushed gold prices to their peak since November 26. "Gold has had a nice bit of a rally and now we're into the holiday period so there's no longer full participation from traders and you might see a reduced appetite for risk which isn't helping gold much," said Ed Moya, senior market analyst at broker OANDA.

The choppy trading is likely to last through the end of the year before finally consolidating above the psychological $1,800 level next month or so amid omicron headlines, Moya added. While gold is considered a hedge against inflation and higher uncertainty, rising interest rates will increase the chances of losing holding non-yielding gold.

But the uncertainty due to the omicron could lead to a more dovish central bank narrative in 2022, which should help gold. "We could still see modest gains for the precious metal as the bearish positioning trend suggests the metal may be more responsive to doubts that are starting to emerge around the Fed's ability to deliver on their hawkish stance," TD Securities said in a note.