Gold holds tight range as higher yields counter Omicron fears

Reuters2021-12-22

Dec 22 (Reuters) - Gold traded within a tight range on Wednesday as higher U.S. Treasury yields and improved risk appetite countered concerns about the rapidly spreading Omicron coronavirus variant.

FUNDAMENTALS

Spot gold was little changed at $1,789.12 per ounce by 0126 GMT. U.S. gold futures also remained unchanged, at $1,789.50.

U.S. Treasury yields were higher on Tuesday as traders focused on optimistic economic conditions and discounted inflation fears at a 20-year bond auction. Higher yields increase the opportunity cost of holding bullion, which pays no interest.

Global shares rose, with European and U.S. stocks rebounding on renewed risk appetite, despite the surging number of Omicron cases around the world.

Countries across Europe considered new curbs on movement on Tuesday while U.S. President Joe Biden appealed to all Americans to get vaccinated to fight the Omicron variant sweeping the world days before the second Christmas of the pandemic.

The U.S. Food and Drug Administration is set to authorise COVID-19 treatment pills from both Pfizer Inc and Merck as early as Wednesday, Bloomberg News reported, citing people familiar with the matter.

The dollar index edged lower, starting a third successive session under pressure as investors favoured riskier currencies and asset classes.

Spot silver was down 0.1% at $22.47 an ounce, platinum shed 0.3% to $931.99 and palladium was up 0.2% at $1,795.17.

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