Gold prices climbed on Tuesday as the U.S. dollar weakened and concerns over the spread of the Omicron coronavirus variant led bullion’s year-end rally to a more than one-month high.
Spot gold was up 0.3% at $1,816.70 an ounce by 1145 GMT, its highest since Nov. 22, while U.S. gold futures rose 0.5% to $1,818.20.
“While there are concerns over the Omicron variant, the investment demand is quite flat. So it is just the year-end rally since there is still some risk-on sentiment present,” said Jigar Trivedi, a commodities analyst at Mumbai-based broker Anand Rathi Shares.
“Gold may not rally too much in the absence of any major economic data and it will remain in this range,” Trivedi said, adding that the positive sentiment on gold at the moment is a result of a weaker dollar.
The U.S. dollar slipped and was near the bottom end of its recent trading range against a basket of peers, supporting gold’s appeal for holders of non-U.S. currencies.
Limiting gains in safe-haven bullion, shares in Europe and Asia edged higher on Tuesday, helped by another record-setting day on Wall Street.
“Given Omicron’s rise, expectations of hawkish Fed action in 2022 will see a rethink; and if this happens, gold could start to break out of its range,” said Harshal Barot, a senior research consultant for South Asia at Metals Focus.
In other metals, silver rose 0.6% to $23.18 an ounce while platinum gained 0.4% to $973.96.
Palladium rose 0.4% to $1,977.71, having touched a more than one-month peak of $1,998.50 in the previous session.