Gold held steady at near one-week high hit in the previous session as the U.S. dollar and Treasury yields, key influences on bullion prices, were flat.
Gold price is retreating from multi-day top but holds comfortably above $1,800. The US dollar rebound is weighing on gold but weaker yields could cap the losses.
Analysts have said gold trading is likely to remain thin and range-bound this week.
Higher yields increase the opportunity cost of holding bullion, which pays no interest, while a weaker dollar makes green back-priced gold less expensive for holders of non-U.S.currencies.
Spot silver fell 0.1% to $23.01 an ounce, platinum edged 0.2% lower to $968.51, and palladium dropped0.6% to $1,959.48.
Analyst View
Credit Suisse : XAU/USD at risk of plunging below $1,500. Rising US Real Yields seen as a major negative driver for gold. “Whilst we believe further USD strength will be a headwind for gold, a key driver for remains US Real Yields. Our base case remains that US Real Yields are in the process of establishing yield bases and with rising Real Yields seen as a major negative driver for gold. we would expect the $1,565/61 zone to hold at first, big picture, we would see scope for an eventual fall to $1,452/40.”
Kitco senior analyst see the gold trend in first quarter of 2022 expected to be upward. Main factors are inflation rate and FED’s slightly tightening monetary policy, though dollar appreciates. Gold price are expected to be stalled in the period between Christmas and end of years.
FX and Central Bank Update
EUR/USD continues to fluctuate in a very tight range around 1.1300 as trading volumes remain thin following the Christmas break. There won't be any high-tier data releases in the remainder of the day and subdued trading action is likely to remain unchanged.
Stock market and Economic Update
Global stock markets rose on Monday and oil prices easedas investors hailed strong U.S. holiday season sales and somegrew less fearful about economic damage from the Omicron variant of COVID-19.
Report from Mastercard SpendingPulse shows U.S. holiday sales jumped 8.5% from last year as consumers spent more money on clothes, jewelry and electronics. Sales grew across the board, both in stores and online, for the holiday season defined as Nov. 1 to Dec. 24. Sales surged 47% for apparel, 32% for jewelry and 16% for electronics compared with 2020.
Energy & Oil Update
Market will focus on OPEC and OPEC plus meeting that arranged on January 4, 2022. The agenda is to decide oil production plan for February 2022.
Covid-related Update
France reported a daily record of more than 100,000 new coronavirus cases as the government considers measures including requiring people to be fully vaccinated to enter bars, restaurants and cultural venues.
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