Should you invest in gold amid Omicron concerns?

However, due to the current uncertainties surrounding Omicron, any news around the newly found variant could result in gold prices spiking upwards in the short term, Fahoum said while speaking to CNBC-TV18.

Talking about gold’s performance, he said that irrespective of global developments on the virus front, spot gold prices have a strong support at $1755 per ounce. In the near term, any fall in gold prices will also be supported by the uncertainties brought along by Omicron.

In the medium term, however, Fahoum said that there are expectations around interest rate hikes and that will keep gold prices muted which can result in a rangebound market for gold.

“On the domestic front, demand for physical gold may witness a dip, compared to the past few months wherein gold prices were supported by high demand on the back of the festive season in India. On the long term horizon, the uptrend in gold prices is still intact,” he added.

Replying to this, Vidit Garg, Director at MyGoldKart said that gold is historically viewed as a hedge against inflation and is considered a safe investment because it can be used as a protection against currency fluctuation and inflation.

“Out of all the available mediums of investments, investing in gold is the safest of all. So, investors can make short to medium-term investments now," Garg said.

Echoing his views, Nitin Misra, Co-founder at Indiagold said that gold becomes the go-to safe-haven asset when there is concern about a big global political, economic, or healthcare crisis.

Although the medical jury on Omicron and its impact on trade and travel are still out, the initial knee-jerk reaction to the Omicron revelation appears to have settled for now. In addition, the Federal Reserve's tapering and interest rate hikes will raise government bond yields, raising the opportunity cost of gold, Misra told CNBC-TV18.