NEW YORK: Gold prices slid to a one-week low on Wednesday, dragged by growing appetite for riskier assets and firmer U.S. Treasury yields, although the metal pared some earlier losses on a weakening dollar.
Spot gold was last down 0.3% to $1,799.91 per ounce by 10:38 a.m. EDT (1538 GMT), having hit a low of $1,788.33 an ounce earlier. U.S. gold futures dropped 0.5% to $1,801.40.
“Risk appetite might be a little stronger today,” said Peter Mooses, a senior market strategist at RJO Futures, adding that the pullback might not be long term and just last for a couple days amid the uncertainty around the Omicron variant cases.
Gold prices are likely to hover around the $1,800-mark for the first quarter in 2022, Mooses said, and that wider price ranges could be seen if news around the Omricon variant worsens.
Among major stock markets, the Dow inched towards an all-time high amid low liquidity in the final week of the year, while benchmark 10-year yields rose as much as 1.526%, the highest since Dec. 9.
Higher bond yields make non-yielding bullion less attractive.
Limiting losses in dollar-denominated bullion, however, the dollar index dropped 0.4%.
“With room for inflation to continue its consistent rise on the back of festive buying pressures and constricted supply chain bottlenecks, spot gold could see another move higher before the hawkish tilt from most major central banks weigh negatively on the yellow metal next year,” said DailyFX analyst Warren Venketas.
Gold is on track for the biggest yearly decline since 2015, having fallen nearly 5% so far this year.
Meanwhile, spot silver was down 1% at $22.77, platinum dropped 0.9% to $966.67 and palladium shed 0.8% to $1,974.49.