Gold hemmed in tight range as weaker dollar counters improved risk sentiment

Gold prices were stuck in a tight range on Tuesday as a slightly weaker dollar countered an improvement in risk sentiment, while a surge in cases due to the Omicron coronavirus variant persist as a worry for investors.

Spot gold was last up 0.1% at $1,791.73 per ounce as of 0457 GMT, while U.S. gold futures fell 0.1% to $1,792.30.

The U.S. dollar index hovered below recent highs, having lost ground overnight after a blow to Democratic spending plans in Washington. A weaker dollar makes the greenback-priced bullion more appealing for overseas buyers.

“Gold investors lack the stomach for any sort of losses still, as evident by recent rapid retreats on rallies above $1,800,” said Jeffrey Halley, a senior market analyst at OANDA.

Gold lacks the momentum to break out of current rangebound trading, Halley said, adding it had “to some extent, become a forgotten asset class into the year-end.”

Asian stocks rose on Tuesday, shrugging off a bruising Wall Street session overnight, as Chinese markets cheered Beijing’s push to help troubled property firms, although surging cases of the Omicron variant persisted as a worry for investors.

Many nations are on high alert against the spread of the virus just days ahead of Christmas and New Year celebrations, as the latest health crisis also takes a toll on financial markets and impacts global economic recovery.

Spot silver was little changed at $22.24 per ounce, platinum fell 0.2% to $930.46, and palladium was little changed at $1,749.80. (Reporting by Seher Dareen in Bengaluru; Editing by Shounak Dasgupta)