Picture: 123RF/LIMBI007
Picture: 123RF/LIMBI007

Bengaluru — Gold prices were stuck in a narrow trading range on Wednesday as market participants headed into year-end holidays, with safe-haven demand fuelled by the rapidly spreading Omicron Covid-19 variant countering a steady improvement in risk appetite.

Spot gold traded flat at $1,787.10/oz by 5.08am GMT, while US gold futures were little changed at $1,788.80.

Omicron concerns abound, but the lack of overtly distressing symptoms provides some relief, which is a reason for a move to riskier assets, said Stephen Innes, managing partner at SPI Asset Management.

It is likely to be an inflationary world in the first quarter of 2022, and that could influence the US central bank to wind down economic support a lot quicker, and could be why gold is selling, but Omicron uncertainties are limiting that downside, Innes said.

The dollar index regained some ground, pressuring the metal by making it more expensive for buyers holding other currencies.

US treasury yields were steady near one-week highs, weighing on gold as higher yields increase the opportunity cost of holding bullion, which pays no interest.

Analysts said year-end trading is likely to remain thin in wider markets, particularly in gold, which could see out 2021 in a largely rangebound fashion.

Despite the number of rising Covid-19 cases, Asian shares gained ground on Wednesday as the risk appetite of global investors rises heading into year-end.

Spot gold may retest a support at $1,785/oz, with a good chance of breaking below this level and falling towards $1,773-$1,778 range, technical analysis showed.

Silver rose 0.2% to $22.53/oz, platinum fell 0.5% to $929.39 and palladium gained 0.3% to $1,798.28.

Reuters

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