Gold drops as easing virus variant concerns curb haven demand

Gold fell after some concerns over the Omicron coronavirus strain eased, boosting risk appetite even as the World Health Organization urged caution.

Two South African health experts, including the doctor who first sounded the alarm about Omicron, suggested the variant is presenting with mild symptoms so far. But the WHO said Sunday it would take time to assess the severity of the new strain and the initial reported infections were among university students, with younger patients tending to have milder symptoms.

Bullion has erased its November rally and is almost back to where it started the month as investors weighed the potential of the Federal Reserve removing policy support at a faster pace to keep inflation in check, with the possible impact of the Omicron strain on the global recovery.

Fed Bank of Atlanta President Raphael Bostic played down the risk of the new variant to the US economy.

Spot gold dropped as much as 1.3 per cent before trading 0.4 per cent lower at $1,795.26 an ounce by 7.59am in Singapore. The Bloomberg Dollar Spot Index steadied after a 0.3 per cent decline on Friday, while S&P 500 and Nasdaq 100 contracts were in the green and oil rebounded.

Platinum rose 2.4 per cent, while silver advanced 0.7 per cent and palladium climbed 0.9 per cent.