Why Gold Prices Have Surged?

Gold rose Friday morning in Asia, poised for its worst week in five months on growing bets. The US Federal Reserve will begin to taper and raise interest rates faster than expected to stem rising inflation.

Gold futures rose 0.76% to $1,797.80. The yellow metal fell more than 2.8% during the week and is heading for its worst week since June 18, 2021.

Goldman Sachs analysts said in a note Thursday that the Fed is likely to double the pace of reducing the monthly bond purchases it began in January 2021 to $30 billion and finish its asset-shortening scheme by mid-March 2022.

Cases of COVID-119 are soaring on the European continent that Germany is considering reimposing a lockdown after neighboring Austria went into full lockdown earlier in the week.

In Australia, retail sales grew by 4.9% m/m, better than expected in October.

China’s net gold imports through Hong Kong jumped to the highest level since June 2018 in October, with buyers hoarding the metal as a safe haven to ease inflation.

Japan’s core CPI grew 0.3% y/y, while Tokyo Food and Energy CPI posted 0% m/m growth in November.

As for other precious metals, silver fell 0.1 percent, platinum 0.6 percent and palladium 0.4 percent.