Gold eases as investors assess Omicron impact
Gold eased on Monday, resuming a broad decline from the previous week, as the dollar firmed and risk sentiment recovered with markets weighing how severe the economic impact would be from the Omicron coronavirus variant.
Spot gold fell 0.4% to $1,784.41 per ounce by 11:17 a.m. ET (1617 GMT) after ending last week 2.9% lower, its biggest weekly drop since June. U.S. gold down -$2.9 settled at $1,785.20
A semblance of calm returned to world markets following last week’s selloff that was driven by the discovery of the new variant that prompted some countries to tighten border controls.
With people trying to digest news about the new COVID-19 variant, “the reality of the situation, with equities bouncing back right now and gold kind of flat, is people are into risk-on assets,” said Bob Haberkorn, senior market strategist at RJO Futures.
The prospect of higher interest rates, which lift the opportunity cost of holding non-yielding assets, had been weighing on gold, and the market was closely tracking the timeline for the U.S. Federal Reserve to tighten policy.
Likely posing additional headwinds for gold, the dollar firmed, making bullion more expensive for overseas buyers, while U.S. Treasury yields climbed.
Until we get more news about the Omicron and its potential, “the market will continue to trade with uncertainty. That will not only impact some of the markets that depend on demand, like energy and metals and stock markets, but also gold,” Saxo Bank analyst Ole Hansen said.
Elsewhere, spot silver fell 1.3% to $22.82 per ounce. Among the autocatalysts, platinum gained 1.2% to $965, and palladium climbed 2.2% to $1,786.68.
“While automotive demand remains constrained from the semiconductor chip shortage, the price is likely to remain under pressure,” analysts at Heraeus precious metals said in a note.
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The Democratic-controlled U.S. Congress could vote as early as Wednesday to continue funding the federal government, according to congressional aides, avoiding what would be a politically embarrassing partial shutdown.
Negotiators were working out how long to extend government funding, with sources saying the target ranged from mid-January to as late as February. Congress needs to buy time to tackle another looming crisis - the risk of the federal government defaulting on its $28.9 trillion debt if lawmakers do not extend it.
The House of Representatives and Senate have until midnight on Friday to renew temporary legislation maintaining government operations, ranging from national parks and air traffic control to military pay and medical research.
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German consumer price inflation rose further in November to hit another record high, preliminary data showed on Monday, increasing pressure on the European Central Bank to react.
Consumer prices, harmonised to make them comparable with inflation data from other European Union countries, rose 6.0% year-on-year following an increase of 4.6% in October, the Federal Statistics Office said.
Cryptocurrencies post record inflows in first 11 months -CoinShares
Cryptocurrency products and funds posted record inflows in the first 11 months of the year, as institutional investors flocked into the space despite price declines in the last few weeks, data from digital asset manager CoinShares showed on Monday.
Total inflows into the sector were $9.5 billion as of Nov. 26, an all-time high. In 2020, total bitcoin inflows were $6.7 billion.
On the week, inflows reached $306 million.
Bitcoin saw its largest inflows in five weeks totaling $247 million, CoinShares data showed, following the launch of another investment product in Europe.
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Oil recoups losses from Friday, focusing on omicron Covid variant spread, Iran talks
Oil prices rose on Monday, recouping some losses after Friday’s plunge of about $10 a barrel, as investors looked for bargains but remained cautious with the focus on the omicron coronavirus variant and Iran nuclear deal negotiations.
Brent crude futures climbed $3.05, or 4.2%, to $75.77 a barrel by 0014 GMT, after falling $9.50 on Friday.
U.S. West Texas Intermediate (WTI) crude was up $3.27, or 4.8%, at $71.42 a barrel, having tumbled $10.24 in the previous session.
Reference: CNBC, Reuters, Worldometers
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