Gold Eases as Markets Eye Omicron impact

Gold eased on Monday, resuming a broad decline from the previous week, as the dollar has firmed and risk sentiment recovered with markets weighing how severe the economic impact would be from the Omicron coronavirus variant.

Spot gold fell 0.4% to $1,784.41 per ounce by 11:17 a.m. ET (1617 GMT) after ending last week 2.9% lower, its biggest weekly drop since June. U.S. gold futures remained unchanged at $1,786.30.

A semblance of calm returned to world markets following last week’s selloff that was driven by the discovery of the new virus variant that prompted some countries to tighten border controls.

Traders are trying to digest news about the new variant, the reality of the situation, with equities bouncing back right now and gold kind of flat, is people are into risk-on assets.

The prospect of higher interest rates, which lift the opportunity cost of holding non-yielding assets, had been weighing on gold, and the market was closely tracking the timeline for the U.S. Federal Reserve to tighten policy.