Dec 8, 2021 – The yellow metal has mostly been hovering just below $1,800 for the past two weeks as investors await next week’s statement from the Federal Reserve about the pace at which the central bank plans to taper stimulus measures. Soaring inflation has caused widespread speculation that the Fed will escalate the pace of the taper.
Investors were also awaiting the release of the November U.S. consumer price index on Friday for the latest barometer on inflation. Fed policymakers are set to meet Dec. 14 and 15 to consider what to do. The statement after the Fed meeting will also be closely watched for indications on the timing of any interest rate increase, which would be bearish for gold.
Gold did get a boost after U.S. President Joe Biden on Tuesday threatened Russian President Vladimir Putin with economic action against Russia if it invades Ukraine. Fears about the spread of the new omicron variant of the coronavirus also put a floor under prices. Gold is a traditional hedge against uncertainty, whether economic or geopolitical.