Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold slipped 0.3% to close under $1,780 after upbeat news about the omicron coronavirus variant stoked risk appetite and the dollar, undercutting alternative assets.

While the rapidly spreading covid strain has now been found in roughly one-third of the US, initial reports suggest its symptoms are milder than expected. The top US official for infectious diseases, Dr. Anthony Fauci, told CNN that "it does not look like there’s a great degree of severity" to reported cases.

Stock investors ran with the news, driving the Dow 1.9% higher while the S&P 500 and Nasdaq added 1.2% and 0.9%, respectively.

Benchmark 10-year Treasury yields bounced higher with the rising risk sentiment, pushing up near 1.44%. The rebound comes after tumbling under 1.36%, the lowest in more than a month, following Friday's weak payrolls data showing only 210,000 jobs were created in November, the least of the year.

Yields were also supported by expectations that the Fed will accelerate the tapering of monetary easing when it meets next week. Fed Chair Powell told Congress last week that there is room to double the monthly reduction to $30 billion per month, ending the program entirely by March.

The conclusion of monetary easing is the first step toward raising interest rates, the Fed's favorite tool to curb inflation. Higher rates lift yields, creating headwinds for gold by increasing the opportunity cost for holding it instead of bonds as a safe-haven asset.

The dollar edged up 0.2% as Forex traders, emboldened by the upbeat omicron news, shed haven currencies like the yen and Swiss franc. A rising makes gold and other commodities pricier overseas, limiting demand.

The other precious metals were mixed, with silver dropping 1% while platinum and palladium climbed 1.1% and 1.8%, respectively.

At the Comex close: February gold slipped $4.40 to $1,779.50; March silver lost 22 cents to at $22.26; January platinum picked up $10.20 to $936.40; and March palladium climbed $33 to $1,845.60 an ounce.