Gold ticks higher as Omicron virus variant woes boost appeal

[BENGALURU] Gold prices edged higher on Monday (Nov 29), as concerns over the impact of the possibly vaccine-resistant Omicron coronavirus variant supported the precious metal's safe-haven appeal.

Spot gold rose 0.1 per cent to US$1,793.72 per ounce by 2.01 am GMT. US gold futures advanced 0.4 per cent to US$1,793.2.

The Omicron coronavirus variant spread around the world on Sunday (Nov 28), with new cases found in the Netherlands, Denmark and Australia even as more countries imposed travel restrictions to try to seal themselves off.

The euro zone is better equipped to face the economic impact of a new wave of Covid-19 infections or the Omicron variant, European Central Bank President Christine Lagarde said.

Atlanta US Federal Reserve President Raphael Bostic said on Friday (Nov 26) he is hopeful that the momentum of the US economy will carry it through the next wave of the pandemic, and said he remains 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.

Japan's retail sales rose for the first time in 3 months in October, though less than expected, and the underlying private consumption trend pointed to persistent strains on a fragile economic recovery despite an easing of Covid-19 curbs.

Physical gold demand picked up in major Asian hubs last week helped by a retreat in prices, with dealers in India preparing for a likely spurt in buying as the wedding season gathers pace.

Spot silver rose 1.1 per cent to US$23.38 per ounce. Platinum gained 2.3 per cent to US$976.01, while palladium was up 2.7 per cent at US$1,794.69.

REUTERS