Metals Stocks: Gold rises modestly in rebound Tuesday, a day after broad-based selloff
Gold futures were catching a slight bit early Tuesday, even as assets considered risky were climbing, limiting the rally for the safe haven metal.
Many global markets, including those for precious metals, will be closed on Friday in observance of the Christmas holiday.
Light holiday trading was likely to create some anomalies in trading action over the next few days but bullish bullion investors may be taking the opportunity to hedge further volatility in markets with haven bets.
“This week, we do not have any important economic event, but traders will find other external factors such as Omicron to drive the gold price action,” wrote Naeem Aslam, chief market analyst at AvaTrade, in a daily note. “Any risk-off event is likely to drive the gold price higher.”
Meanwhile, the dollar was weaker on the early session, down 0.1%, as gauged by the ICE U.S. Dollar Index DXY, -0.19%. Weakness in the dollar can make assets priced in the currency comparatively less expensive to overseas buyers.
March silver SIH22, +2.08% was trading 43 cents, or 2%, higher to reach $22.73 an ounce, following a 1.1% decline for gold’s sister metal on Monday.
On Monday, gold and silver sold off despite a broad-based selloff in equities, with the downturn attributed to growing concerns about the potential for the spread of the omicron variant of the COVID to harm the global economic rebound. It is an environment that should have delivered a boost to gold and silver but light liquidity might have forced some traders to sell to gold investments, some analysts speculated.
Negative headlines about the transmissibility of omicron persist.
The Centers for Disease Control and Prevention said Monday that the omicron variant caused more than 70% of recent COVID-19 cases in the U.S. The COVID strain has overtaken delta in parts of the world and has reached at least 89 nations world-wide since being identified in parts of southern Africa in late November.