Gold Steady Near 6-Week High as Omicron Woes Counter Higher Yields

GOLD - JAKARTA. Gold prices held steady near a six-week high on Monday in thin trade, as safe-haven buying fuelled by an Omicron-driven surge in coronavirus infections countered pressure from higher U.S. Treasury yields.

Spot gold was steady at $1,824.74 per ounce, as of 0615 GMT, after hitting its highest since Nov. 22 at $1,831.62 earlier in the session. U.S. gold futures edged down 0.1% to $1,826.40.

"The number (of Omicron cases) is rising undoubtedly, so that is supporting gold. But at the same time it is not as severe as the Delta variant ... So, that's why prices are not shooting very sharply," said Jigar Trivedi, a commodities analyst at Mumbai-based broker Anand Rathi Shares.

Trading is thin as most markets are still shut and gold will remain in a range of $1,815 to $1,830 near-term, he said.

Benchmark 10-year U.S. Treasuries ended 2021 with the largest yield increase since 2013. Higher yields raise the opportunity cost of holding non-interest paying gold.

The U.S. dollar index held close to one-month lows touched on Friday, boosting gold's demand by making the metal cheaper for buyers holding other currencies.

The Christmas and New Year holidays are typically a peak time for air travel, but the rapid spread of the highly transmissible Omicron variant has led to a sharp increase in COVID-19 infections and dampened New Year festivities around much of the world.

Continued focus on the Ukraine border with Russia had brought investors' interest back to gold as a safe haven, and a weaker dollar provided further support to the metal, Phillip Futures analyst Avtar Sandu said in a note.

U.S. President Joe Biden told his Ukrainian counterpart Volodymyr Zelenskiy that Washington and its allies would "respond decisively" if Russia further invades Ukraine, the White House said in a statement.

Spot silver fell 0.7% to $23.10 an ounce, platinum was up 0.1% to $963.00, and palladium rose 0.2% to $1,896.56.