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Gold futures on Friday climbed back above the $1,800 level to a three-week high.
February gold
GCG22,
GC00,
was up $14.90, or 0.8%, to reach around $1,813.10 an ounce, following a 1.9% gain on Thursday, which helped the yellow metal ring up its highest settlement since Nov. 22 and produced a roughly 1.6% weekly gain thus far.
Gold is drawing greater interest amid a raft of central-bank policy shifts this week that come amid an uncertain period for the global economy, as the omicron variant of the virus that causes COVID-19 spreads rapidly, analysts note.
The Bank of England surprised the market on Thursday with a 15 basis-point hike to its benchmark interest rate to 0.25%. The European Central Bank, meanwhile, left key interest rates unchanged and reiterated that its Pandemic Emergency Purchase Programme will end in March as planned.
Both moves come after the latest projections for the Federal Reserve point to three interest rate increases in 2022 and a phase out of the central bank’s bond buying by March next year.
Against that backdrop markets have been volatile which has prompted some buying of safe-haven assets in the near to medium term.
Some analyst also pointing to percolating tensions between China and the U.S. as buttressing gold buying.
“It is not a surprise to see gold edging higher as global uncertainties brought by Central Banks and rising US-Sino tensions continue to undermine investors’ appetite for riskier assets,” writes Pierre Veyret, technical analyst at ActivTrades, in a daily note.
“In addition, the recent drop registered by the US Dollar following the Fed’s monetary decisions provided further support for safer havens and commodity markets in general,” the analyst wrote.
The dollar was down about 0.1% on the week, as gauged by the ICE U.S. Dollar Index
DXY,
but is up 6.8% in the year to date, compared with a 4.4% decline for gold over the same period.
Meanwhile, March silver
SIH22,
SI00,
was headed 11 cents, or 0.5%, higher and on track for a 1.8% weekly gain.
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