WASHINGTON (dpa-AFX) - Gold prices rose on Friday as the increasing emphasis on controlling inflation helped increase the bullion's appeal as an inflation hedge.
Spot gold rose half a percent to 1,807.78 per ounce, while U.S. gold futures were up 0.6 percent at $1,808.25.
Investors are piling into inflation-linked assets amid bets that rising inflation will force global central banks to raise interest rates sharply in future.
The Bank of England lifted its key interest rate unexpectedly on Thursday, while the European Central Bank announced an end to net purchases under the pandemic emergency purchasing program in March.
The Fed doubled the pace of tapering of bond purchases and signaled three interest rate hikes in 2022.
Elsewhere, the Bank of Japan decided to scale back its pandemic related funding measures as the economy is set to recover amid waning supply-side constraints.
As investors seek portfolio diversifiers to hedge macro risks, growing Omicron worries have added a risk premium in gold prices.
Dr. Anthony Fauci, President Joe Biden's top medical advisor, said that the U.S. is experiencing a resurgence of the delta variant and that Omicron will become the dominant Covid-19 variant in the United States within a few weeks.
Fauci also said that some of the rapid at-home Covid-19 tests available in the U.S. may not accurately pick up the new super mutant Omicron variant.
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