Gold prices witnessed a slight decline in trading on Wednesday, with the end of the year holidays approaching, as risk appetite improved to meet the demand for safe haven fueled by the fast-spreading Omicron mutation.
Prices of the yellow metal fell for the second consecutive session, at the end of trading on Tuesday, with the rise in US Treasury bond yields.
Gold prices today
The price of gold futures contracts for February delivery decreased by 0.06%, to reach the level of 1787.60 dollars an ounce.
The spot price for the yellow metal declined by 0.12%, to $1,787.14 an ounce.
At the same time, the price of silver futures contracts – for March delivery – decreased by 0.15%, recording $22.50 an ounce.
Also, spot platinum decreased by 0.23%, to record $935.77 an ounce, while the price of spot palladium rose by 0.83%, to $1811.14 an ounce.
This comes in conjunction with the dollar index rising 0.1% to 96.585 points after two days of losses, which pressured gold by making it more expensive for buyers holding other currencies.
“Despite Omicron’s many concerns, the lack of overtly painful symptoms provides some relief, and is a reason to move toward riskier assets,” said Stephen Innes, managing partner at SBI Asset Management.
US Treasury yields were flat near one-week highs, weighing on gold, as higher yields increase the opportunity cost of holding bullion, which pays no interest.
Gold Market Forecast
“With trading volume weak and major players excluding before the end of the year, the gold market is expected to be volatile.. Momentum is lacking, and prices are likely to consolidate within the comfortable range,” said Philip Futures analyst, Avtar Sandu.
Despite the rise in the number of coronavirus cases, Asian stock markets rose broadly on Wednesday, with global investors rising risk appetite towards the end of the year.
Technical analysis showed that spot gold may retest the support level at $1,785 an ounce, with a good chance of breaking below that level and falling towards the $1,773-$1778 range.