Gold holds tight range as higher yields counter Omicron fears

[BENGALURU] Gold traded within a tight range on Wednesday (Dec 22) as higher US Treasury yields and improved risk appetite countered concerns about the rapidly spreading Omicron coronavirus variant.

Spot gold was little changed at US$1,789.12 per ounce by 1.26am GMT. US gold futures also remained unchanged, at US$1,789.50.

US Treasury yields were higher on Tuesday (Dec 21) 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 US 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 US 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 US Food and Drug Administration is set to authorise COVID-19 treatment pills from both Pfizer 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 per cent at US$22.47 an ounce, platinum shed 0.3 per cent to US$931.99 and palladium was up 0.2 per cent at US$1,795.17.

REUTERS