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Clinging to Omicron Fears, Gold Rides out Talk of Faster Fed Taper -Breaking

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By Barani Krishnan

“Every crisis has its silver lining.” Or so, the saying goes.

And in gold’s case, Covid’s Omicron variant and the crisis of confidence it has spawned in the global recovery from the pandemic, appears to be in the yellow metal’s favor.

All week, there was concern that gold might plummet into $1,600 territory. Federal Reserve Chair Jerome Powell, who announced his intention for the bank to taper its pandemic-era stimulus faster and increase U.S. interest rates quicker than previously thought, had raised expectations.

But fears about the Omicron’s potential impact on the United States and the world proved bigger in the end, triggering safe-haven buying in gold. That helped the yellow metal’s prices to hover in the high $1,700s and post a gain at the close of Friday’s futures trade in New York.

U.S. gold futures’ most active contract, , settled Friday’s trade up $21.20, or 1.2%, at $1,783.90 an ounce. The week’s loss was a mere 0.2%.

“It’s odd but gold didn’t melt down on the Fed’s threat for a quick taper or rate hike, and instead coasted on the bigger worry associated with the Omicron,” said Phillip Streible, precious metals strategist at Blueline Futures in Chicago. “Talk about a crisis in need.”

To buttress the gold story, the International Monetary Fund even said the Omicron variant was likely to reinforce the IMF’s decision to downgrade global growth forecasts it made in October — a decision already in the works since the protracted impact of the Delta variant of Covid.

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