Gold gains as preventive curbs increase on spike in Omicron cases

[BENGALURU] Gold prices gained on Tuesday (Jan 4) amid curbs to contain the spread of Omicron coronavirus cases, while a rise in US Treasury yields supported by inflation fears kept safe-haven bullion's gains in check.

Spot gold rose 0.3 per cent to US$1,806.20 per ounce by 1.09 am GMT, after slipping from a more than 1-month high of US$1,831.62 in the previous session.

US gold futures were up 0.2 per cent to US$1,804.50.

The Omicron variant of the coronavirus appears to be far more contagious than previous iterations, but data suggests it may be less virulent than Delta, which swamped hospitals last year, leading various nations to take preventive measures.

A number of businesses, including several major US banks, have encouraged staff to work from home during the first few weeks of the year.

The US Food and Drug Administration on Monday (Jan 3) authorised the use of a 3rd dose of the Pfizer and BioNTech Covid-19 vaccine for children ages 12 to 15, and narrowed the interval for booster shot eligibility to 5 months from 6.

Benchmark 10-year Treasury yields rose to a more than 1-month high in the previous session, with investors believing the Fed could raise rates in March soon after it completes tapering of its bond purchases.

Higher yields raise the opportunity cost of holding non-interest paying gold.

Money markets have fully priced in a first US rate increase by May, and 2 more by the end of 2022.

Spot silver rose 0.3 per cent to US$22.92 an ounce, platinum was up 0.3 per cent to US$957.49, and palladium gained 1 per cent to US$1,843.18.

REUTERS