“Goldman Sachs on Saturday cut its outlook for U.S. economic growth to 3.8% for 2022, citing risks and uncertainty around the emergence of the Omicron variant of the coronavirus,” said Reuters in one of the news pieces published Sunday.
The news quotes Goldman economist Joseph Briggs as saying, “the Omicron variant could slow economic reopening, but the firm expects ‘only a modest drag’ on service spending.”
“The firm now sees 2022 gross domestic product (GDP) growth of 3.8%, down from 4.2% previously on a full-year basis, and Q4/Q4 growth of 2.9%, down from 3.3% before,” adds Goldman’s Briggs, per Reuters.
Key quotes
Goldman pointed the spread of the virus could worsen supply shortages should other countries implement tighter restrictions, but increase in vaccination rates among foreign trade partners would prevent severe disruptions.
Goldman Sachs' U.S. forecast comes after the International Monetary Fund Managing Director Kristalina Georgieva said on Friday that the lender was likely to lower its global economic growth estimates due to the new Omicron variant of the coronavirus.
FX implications
The downbeat growth forecasts for the world’s largest economy weigh on the market sentiment, underpinning the safe havens. However, a lack of fresh catalysts and mixed updates for the South African covid variant weigh on the gold prices.
Read: Gold Price Forecast: 200-DMA, sour sentiment test XAU/USD rebound
