(MENAFN- Khaleej Times) Sun 28 Nov 2021, 8:36 AM

Last updated: Sun 28 Nov 2021, 9:22 AM

The new variant of coronavirus Omicron has rattled the markets, but it's likely to be positive for the gold price, say analysts.

The precious metal closed the week at $1,792.6 per ounce, up 0.03 per cent on Friday. In the UAE, 24K was trading at Dh217.0 per gram, 22K at Dh204.0, 21K at Dh194.5 and 18K at Dh166.75 on Sunday morning.

'The news of the new Covid-19 variant has hit the market. This is likely to be positive for gold in the near term as there could be a fear that measures to combat the virus will lead to weak economic growth. If there is a probability of a slowdown, central banks will quickly shift their monetary policy stance from tightening to accommodative. And history suggests that the first resort of central banks in any crisis is to print more money,' said Vijay Valecha, chief investment officer at Century Financial.

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US 10-year treasuries already seem to reflect these concerns as the yields have fallen from a high of 1.688 per cent to 1.538 per cent.

'So gold, a noninterest-bearing asset, will benefit in the current scenario and will likely target $1,835 in the near term, and $1,790 could see buying interest,' added Valecha.

In the UAE, 24K is likely to move in the range of Dh212.50 and Dh223 per gram in the near term.

Jeffrey Halley, senior market analyst for Asia-Pacific at Oanda, expects yellow metal maintaining its range between $1,780 and $1,810 with a bias to the upside.

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