Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold gained 0.4% to close above $1,784 as growing concerns about the Omicron variant pressured equities and bond yields, fueling demand for safe-haven assets.

The first US case of the worrisome Omicron covid variant was reported in San Francisco, according to Dr Anthony Fauci, President Biden's top medical advisor. Discovered recently in South Africa, the new strain apparently contains a variety of mutations that increase its infectiousness and may limit the effectiveness of vaccines.

Wall Street tumbled from gains to sharp losses after Fauci's announcement as investors, alarmed by the uncertainty surrounding the variant's effect on the global recovery, shed risk. The Dow and S&P 500 lost 0.8% and 0.5%, respectively, while the Nasdaq shed 1.2%.

Solid US economic data were not enough to sustain risk appetite. ADP reported private payrolls added 534,000 jobs in November, more than forecast. The ISM manufacturing index edged higher, and the Fed's Beige Book reported moderate growth, if sharply higher prices, across most of the country.

Risk-off sentiment was also propelled by Fed Chair Jerome Powell's statement yesterday that the Fed may accelerate the removal of monetary stimulus to prepare for earlier rate hikes, the central bank's preferred tool for fighting inflation.

Treasury yields tumbled as traders shifted from risk to safety, with benchmark 10-year yields dropping under 1.43%. Lower yields support gold by reducing the opportunity cost for holding it instead of bonds as a safe-haven asset.

The other precious metals were mostly higher, with platinum and palladium rising 0.9% and 2.8%, respectively, while silver slid 2.1%.

At the Comex close: February gold gained $7.80 to$1,784.30; March silver dropped 48 cents to $22.34; January platinum rose $7.90 to $935.20; and March palladium picked up $48 to $1,753.50 an ounce.