Gold inches up heading into Christmas on weaker dollar

Gold prices edged higher on Thursday in thin year-end trading, as the safe-haven dollar weakened following encouraging study results on the Omicron COVID-19 variant and rising optimism about the global economic outlook.

Spot gold rose 0.2% to $1,806.12 per ounce by 0455 GMT, adding about 0.5% for the week so far in what could be its second straight weekly gain. U.S. gold futures climbed 0.3% to $1,807.10.

Early trading in Asia saw a global share rally continue and the dollar on the back foot as concerns eased about the impact of the Omicron COVID-19 variant and markets cheered strong U.S. economic data.

The dollar index hovered near a one-week low against riskier rivals, making gold less expensive for holders of non-U.S. currencies.

Investors took stock of data showing U.S. economic growth slowed sharply in the third quarter amid a flare-up in COVID-19 infections, although activity has since picked up, putting the economy on track for its best performance this year since 1984.

Thin trading and Christmas buying are keeping gold above the $1,800 level, said Michael Langford, director at corporate advisory AirGuide, adding that these factors were creating a bit of a short-term positive for the metal.

Langford said positive weekly U.S. jobless data, due later in the day, could be negative for gold as it would imply no changes in direction to the Federal Reserve’s tapering program.

A South African study suggested reduced risks of hospitalization and severe disease in people infected with the Omicron variant versus the Delta one.

Silver rose 0.4% to $22.87 per ounce, platinum climbed 0.5% to $969.50, and palladium dropped 1.5% to $1,854.02. (Reporting by Seher Dareen in Bengaluru; Editing by Devika Syamnath)