Gold steady as Omicron fears offset strength in dollar
Gold prices steadied on Monday as concerns over the impact of the Omicron coronavirus variant offset a stronger dollar, with investors assessing whether the emergence of the variant could change the U.S. Federal Reserve's more hawkish stance.
Spot gold was little changed at $1,792.41 per ounce by 0446 GMT, while U.S. gold futures advanced 0.4% to $1,792.60.
With new cases of the Omicron variant found in the Netherlands, Denmark and Australia, more countries imposed travel restrictions to try to seal themselves off.
"Given the uncertainty around whether this new variant is more dangerous than the Delta variant and the risk of further restrictions, gold's downside should be protected," Harshal Barot, a senior research consultant for South Asia at Metals Focus, said, adding that it could trade between $1,780 and $1,830.
Barot also said while it was too soon to gauge if virus concerns have eased rate hike expectations, there is an upside risk for gold that the variant eventually leads the Fed to scale back on its stimulus tapering and rate rise plans.
Atlanta U.S. Federal Reserve President Raphael Bostic was the latest amongst a growing number of Fed officials to say he remained open to accelerating the pace of the central bank's bond taper.
Reduced stimulus and interest rate hikes tend to push government bond yields up, raising the opportunity cost of gold, which pays no interest.
Countering upbeat triggers for gold, however, the dollar index gained 0.2%, increasing bullion's cost to buyers holding other currencies.
Physical gold demand picked up in major Asian hubs last week, with dealers in India preparing for a likely spurt in buying as the wedding season gathers pace. read more
Spot silver rose 1% to $23.35 per ounce. Platinum gained 2.1% to $973.81, while palladium added 2.6% to $1,794.05.
· China could double down on its zero-Covid approach amid concerns about omicron, analysts say
· Japan to bar foreign visitors as Omicron worries grow globally
Japan, the world's third-biggest economy, will close its borders to all foreigners, while Australia's plans to re-open to skilled migrants were also in doubt as nations scrambled on Monday to rein in the spread of the Omicron variant of the coronavirus.
Markets regained some composure as investors await more details of the variant following a freefall last week after news of its emergence ignited fears that fresh curbs could upend a nascent economic revival from a two-year pandemic.
· Singapore, Malaysia reopen land border amid worries over the Omicron variant
Singapore and Malaysia reopened one of the world's busiest land borders on Monday, allowing vaccinated travellers to cross after nearly two years of being shut down due to the COVID-19 pandemic.
· Nuclear talks resume as West asks whether Iran is serious or stalling
· Delta variant is still the ‘major cause of the pandemic’ despite worries about omicron, WHO says
Reference: CNBC, Reuters
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