Gold prices fell on Thursday from mid-October, after a few days of volatile trading since the announcement of a new Omicron version of COVID at the end of last week.
Chintan Karnani, research director at Insignia Consultants, told Businesshala that most traders and investors believe the Omicron version “will not cause catastrophic damage to the global economy.”
“They are preferring stocks to safe havens like gold,” he said. “Technical traders are also not buying because there is a short-term technical bearishness.”
For now, “traders are just killing in the dark” until there is “clarity” on Omicron from the World Health Organization, Karnani said. “Gold and safe haven are not in their short term portfolio. Some traders are sitting only on cash in the last month of the year.
Most active February gold contract GCG22,
Comex was down 1.2%, or $21.60, to close at $1,762.70 an ounce. This was the lowest settlement for the most active contract since October 12, according to Dow Jones market data.
March Silver SIH22,
It fell 2 cents, or 0.1%, to $22.316 an ounce, a day after losing 2.1%.
“Omicron’s fears have eased somewhat this weekend and it is bringing some risk appetite back into the market. Crude oil market decline this week is also negative for metals markets,” Kitco.com .com senior analyst Jim Wyckoff said in a note to clients.
That said, with the precious metal trading 1.3% lower so far this week, gold has struggled to see much of a haven boost from variants.
Naeem Aslam, Chief Market Analyst, AvaTrade, said in a market update, “Markets are crashing and investor behavior is becoming extremely volatile, gold prices may rise if Omicron’s cases continue to rise.”
In US economic data on Thursday, weekly jobless claims rose by 28,000 to 222,000, partly reversing a steep decline in the prior week that pushed new jobless claims to a 52-year low.
Meanwhile, the ICE US Dollar Index DXY,
was trading higher at 96.138, and the 10-year Treasury note yields TMUBMUSD10Y,
It was up from 1.433% on Wednesday at 1.455%.
Changes in the dollar and Treasury yields can affect gold because the metal is priced in US dollars and carries no interest.
Other metals traded on Comex include March Copper HGF22,
up 1.2% to $4.299 a pound.
Jan Platinum PLF22,
March palladium PAH22, while down 0.2% to $933.10 an ounce,
rose 1% to $1,771.40 an ounce. Both trade slightly lower for the week so far, and are on track with losses for the year.
Platinum, Palladium on overall uptrend for commodities, poised for huge losses in 2021