Gold held a decline on increasing evidence that the omicron virus variant doesn’t pose a major threat to global economic growth.
The new strain 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 omicron’s milder nature. Still, daily Covid-19 infections hit a pandemic 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 was little changed at $1 806.79 an ounce as of 11:57 a.m. in Singapore, after dropping 0.3% on Tuesday. It’s down around 5% this year. The Bloomberg Dollar Spot Index was steady, silver edged higher, while palladium and platinum were both lower.