Gold Futures Settle Modestly Higher

Gold prices edged higher on Monday, gaining for a second straight session, even as the dollar stayed firm ahead of the Federal Reserve’s monetary policy meeting.

The Fed’s two-day monetary policy meeting gets underway on Tuesday. The Fed is widely expected to discuss accelerating the pace of tapering its asset purchase program, with reports suggesting the central bank could double the rate to $30 billion per month.

Three other major central banks – the Bank of Japan, the European Central Bank and the Bank of England – are also scheduled to announce their monetary policies this week.

The ECB is due to decide on the future of its bond-buying program at a meeting on Thursday, while the Bank of England is set to opt for caution over Covid rather than worries about inflation.

The dollar index, which climbed to 96.45 in the Asian session, was hovering around 96.30 a little while ago, gaining more than 0.2%.

Gold futures for February ended up by $3.50 or about 0.2% at $1,788.30 an ounce, the highest settlement in three weeks.

Silver futures for March ended higher by $0.133 at $22.328 an ounce, while Copper futures for March settled at $4.2840 per pound, down $0.0025 from the previous close.

Worries about the spread of the Omicron variant of the coronavirus in several countries in Europe weighed on riskier assets and prompted investors to seek the safe-haven yellow metal.

The overall risk related to the new variant of concern Omicron remains very high for a number of reasons, the World Health Organization said in a technical brief issued on Sunday, referring to the virus’ potential ability to evade immunity provided by antibodies.

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