NEW YORK: Gold eased on Monday, resuming a broad decline from the previous week, as the dollar firmed and risk sentiment recovered with markets weighing how severe the economic impact would be from the Omicron coronavirus variant.

Spot gold fell 0.4% to $1,784.41 per ounce by 11:17 a.m. ET (1617 GMT) after ending last week 2.9% lower, its biggest weekly drop since June. US gold futures remained unchanged at $1,786.30.

A semblance of calm returned to world markets following last week’s selloff that was driven by the discovery of the new variant that prompted some countries to tighten border controls.

With people trying to digest news about the new COVID-19 variant, “the reality of the situation, with equities bouncing back right now and gold kind of flat, is people are into risk-on assets,” said Bob Haberkorn, senior market strategist at RJO Futures.

The prospect of higher interest rates, which lift the opportunity cost of holding non-yielding assets, had been weighing on gold, and the market was closely tracking the timeline for the US Federal Reserve to tighten policy.

Likely posing additional headwinds for gold, the dollar firmed, making bullion more expensive for overseas buyers, while US Treasury yields climbed.

Until we get more news about the Omicron and its potential, “the market will continue to trade with uncertainty. That will not only impact some of the markets that depend on demand, like energy and metals and stock markets, but also gold,” Saxo Bank analyst Ole Hansen said.

Elsewhere, spot silver fell 1.3% to $22.82 per ounce. Among the autocatalysts, platinum gained 1.2% to $965, and palladium climbed 2.2% to $1,786.68.

“While automotive demand remains constrained from the semiconductor chip shortage, the price is likely to remain under pressure,” analysts at Heraeus precious metals said in a note.