Title: Gold Edges Higher as Traders Weigh Record Covid-19 Infections
Dec 28, 2021 05:36AM ET
Gold prices rose slightly as investors assessed the resilience of the global economic recovery and COVID-19 cases hit a pandemic record.
More than 1.44 million infections worldwide hit an all-time high on Monday, excluding a statistical glitch in Turkey last year. Although the highly transmissible bacterium is spreading rapidly around the world, studies suggest that illnesses caused by the new strain are not as severe as in previous waves.
Gold prices are heading for their first annual loss in three years as central banks begin to scale back pandemic-triggered stimulus to curb inflation. The S&P 500 posted its 69th record close of 2021 on Monday, indicating that investors are still relatively optimistic about the risks posed by Omicron.
The UK said it would not introduce stricter COVID-19 restrictions in England before the end of the year despite a rise in cases, while the US cut the recommended isolation period for Americans with the virus to five days from 10.
"Gold has settled near $1,810 an ounce, reflecting relative stability in the U.S. dollar index and bond yields in the absence of new triggers," said Madhavi Mehta, senior analyst at Kotak Securities Ltd. Concerns about the virus have eased, but rising cases and restrictions to limit its spread are a concern.
Spot gold was up 0.2 percent to $1,815.57 per ounce at 10:15 a.m. in London, marking the fifth day of gains. This year, gold is still down more than 4%. The Bloomberg Dollar Spot Index fell 0.1%. Silver and platinum gained slightly, while palladium slipped 0.7%.
"The sideways trend will continue in the $1,750 to $1,820 range," said Victor Foo, managing director of the Singapore Precious Metals Exchange. "Gold will face some resistance above $1,815 and will continue to struggle at these levels unless the dollar moves significantly lower."
After closing at a two-month high on Monday, copper futures for March fell 0.4 percent on the Comex.