Fundamental analysis
30 November, 2021
Gold prices edged higher on Tuesday, drawing some support from a subdued dollar as investors assessed the severity of the Omicron coronavirus variant's impact on the global economy. The dollar index edged 0.1% lower, reducing the metal's cost to buyers holding other currencies. A growing number of countries have imposed travel restrictions to limit the spread of the newly discovered COVID-19 variant, which the World Health Organization said on Monday carried a very high risk of infection surges. The yield on 10-year Treasury inflation-protected securities (TIPS) has recovered from a record low hit earlier in the month. However, it is still in negative territory, at -1.05% on Tuesday, keeping gold's opportunity cost low. Investors now await Federal Reserve Chairman Jerome Powell's congressional testimony later this week after his warning on Monday that the new COVID-19 strain muddied the central bank's inflation outlook and prices could continue to rise for longer than earlier thought.
