(The Southern African Times) – Gold was steady as year-end optimism helped push U.S. stocks to a fresh record, with traders betting the global economic recovery can weather risks from the omicron virus variant and tightening monetary policy.
The S&P 500 notched its 69th record close this year, led by the energy and technology sectors, though volumes were lower than average. While the highly-transmissible omicron is spreading rapidly around the world, studies suggest that illness caused by the new strain isn’t as severe as previous waves, especially for people who have been vaccinated and received booster shots.
Bullion is heading for its first annual loss in three years as central banks start to dial back pandemic-era stimulus to contain inflation, while investors are also monitoring the threat that omicron poses to economic activity. The U.K. said it won’t introduce stricter Covid-19 restrictions in England before the end of the year despite a surge in cases, while the U.S. cut the recommended isolation time for Americans with the virus to five days from 10 days.
“Gold has turned rangebound near $1,810 an ounce, reflecting the relative stability in the U.S. dollar index and bond yields amid a lack of fresh triggers,” said Madhavi Mehta, a senior analyst at Kotak Securities Ltd. “Virus concerns have subsided, however rising cases and restrictions to limit the spread is a cause of concern.”
Spot gold declined 0.1% to $1,810.09 an ounce at 12:36 p.m. in Singapore, after rising 0.1% on Monday. It’s down almost 5% this year. The Bloomberg Dollar Spot Index was little changed, while silver, platinum and palladium all fell. Copper futures for March dropped 0.5% on the Comex after closing at a two-month high on Monday.
“The sideways trend will continue in the $1,750 to $1,820 range,” said Victor Foo, chief executive officer of Singapore Precious Metals Exchange. “Gold will face some resistance above $1,815 and moving forwards will continue to struggle at these levels unless the dollar moves sharply lower.”