Concerns About the Omicron Helped Boost Gold

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Concerns About the Omicron Helped Boost Gold

The price of gold rose on Wednesday morning in Asia. Its price rose as investors turned to safe-haven assets over the fears of the omicron Covid-19 variant. Still, higher U.S. Treasury yields and a somewhat improved investor risk appetite countered these concerns and capped gold’s gains.

 

Gold futures advanced 0.03% to $1,789.20 by 11:01 PM ET (4:01 AM GMT). The U.S. dollar or the greenback as many people call it, which usually moves inversely to gold, inched up on Wednesday.

 

U.S. Treasury yields advanced on Tuesday after investors focused on optimistic economic conditions and discounted inflation. Interestingly, an auction of 20-year bonds went better than expected.

 

Shares were mostly up in Asia-Pacific on Wednesday, however, cooled a recent global rally. In Hong Kong, the Hang Seng index added 0.34% as of its final hours of trading. Meanwhile, mainland Chinese stocks were mixed on Wednesday. The Shanghai composite fell to 3,622.62. The Shenzhen component gained 0.697% to 14,791.33.

 

In Japan, the Nikkei 225 advanced 0.16% to 28,562.21. The Topix index gained 0.1% to end its trading day at 1,971.51. In South Korea, added 0.32% to 2,984.48.

 

Gold and risk factors

The omicron variant of Covid-19 continues to spread all over the world and some countries are re-imposing stricter measures. U.K.’s Prime Minister Boris Johnson asked people to be cautious, but will not introduce tighter restrictions ahead of the holidays.

Other European countries are also trying to cope with the omicron variant. For instance, France will limit the New Year Eve’s celebrations while Germany will limit gatherings to 10 people.

 

The U.S. Food and Drug Administration (FDA) is also likely to approve Covid-19 treatment pills from Pfizer Inc. and Merck Inc as early as next week.

 

Apart from gold, another precious metal palladium also rose on Wednesday morning. It gained 0.2%. But silver fell 0.1% and platinum dropped 0.3%.

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