Gold Slips Below $1800 as Investors Weigh Omicron Risks
Gold declined for a second day as investors weighed evidence that the omicron virus variant doesn’t pose a major threat.
(Bloomberg) -- Gold declined for a second day as investors weighed evidence that the omicron virus variant doesn’t pose a major threat to global economic growth.
The metal fell as much as 0.7%, breaching the psychologically important $1800 an ounce level. Thin trading during the holiday season may be contributing to larger swings in the price.
The omicron strain of coronavirus isn’t “the same disease we were seeing a year ago,” and even patients who do end up in the hospital spend less time there, according to John Bell, a University of Oxford immunologist, reinforcing reports about the variant’s milder nature. Still, global Covid-19 infections hit a daily record on Monday and could yet overwhelm health-care systems.
Bullion is heading for its first annual loss in three years -- after rallying to an all-time high in 2020 -- as central banks start to dial back pandemic-era stimulus to fight inflation. While uncertainty over omicron has boosted some demand for haven assets, concerns over the threat to economic activity and reopenings appear to be easing.
“Rising inflation, geopolitical factors and the rise in omicron cases have supported gold prices, but further direction hinges on the dollar going forward,” said Gnanasekar Thiagarajan, director at Commtrendz Risk Management Services Pvt. “We can expect prices to be range-bound for now between $1,775 and $1,825.”
Spot gold declined 0.6% at $1,796.13 an ounce as of 11:08 a.m. in London, after dropping 0.3% on Tuesday. It’s down more than 5% this year. The Bloomberg Dollar Spot Index edged higher. Silver, palladium and platinum were all lower.
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