- Faster Fed tapering could push gold to $1,720/oz -analyst
- Focus on U.S. consumer prices index due on Friday
Dec 6 (Reuters) - Gold eased on Monday as sentiment for riskier assets improved and the dollar advanced, with moves limited by overall uncertainty over the Omicron coronavirus variant ahead of this week's U.S. inflation numbers.
Spot gold fell 0.4% to $1,776.30 an ounce by 1242 GMT, while U.S. gold futures dropped 0.3% to $1,779.10.
The dollar firmed, making gold less appealing for overseas buyers, while U.S. 10-year Treasury yields rebounded.
Equities staged a tentative rebound from last week, when the spread of the Omicron variant and expectations of tighter U.S. monetary policy rocked markets.
While the stronger dollar, yields and improved risk appetite are sapping interest in gold, the market is somewhat in limbo as Omicron and the Fed's efforts to fight inflation compete for attention, said Saxo Bank analyst Ole Hansen.
Investors are awaiting U.S. consumer price data on Friday for cues on the Federal Reserve's monetary policy strategy. read more
A milder CPI reading, though unexpected, could reduce some of the focus on interest rate increases in 2022, while additional weakness in the stock markets into December could also drive some safe-haven demand into gold, Hansen added.
Bullion rose 1% on Friday after data showed that U.S. employment growth slowed considerably in November. But the data did little to alter expectations of faster tapering of economic stimulus. read more
"A faster taper announcement looks like a certainty if data on the Omicron variant this week and next confirms it is milder in severity. So gold could come under sustained pressure and potentially trade as low as $1,720 next week," said Jeffrey Halley, senior market analyst at OANDA.
Interest rate increases raise the opportunity cost of holding non-yielding bullion.
In other precious metals, spot silver fell 0.9% to $22.30 an ounce, platinum rose 0.2% to $934.08 and palladium declined 1.9% to $1,775.20.
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