- Dollar edges up, equities rebound
- More countries impose travel restrictions
- President Biden to give update on U.S. response on Monday
Nov 29 (Reuters) - Gold steadied near $1,800 an ounce on Monday after the previous week's broad decline, as fears that the new Omicron coronavirus variant could hamper economic recovery tempered expectations for interest rate hikes next year.
Spot gold was little changed at $1,791.97 per ounce by 1306 GMT after ending last week 2.9% lower, its biggest weekly drop since June. U.S. gold futures rose 0.4% to $1,792.80.
The prospect of higher rates, which lift the opportunity cost of holding non-yielding assets, had been weighing on gold, and the market is closely tracking the timeline for the U.S. Federal Reserve to tighten policy. read more
"If the virus does lead to renewed worries about economic activities, central banks will obviously be caught in between a rock and a hard place because inflation is not going to come down... but growth will, and that leaves them in a very precarious situation," Saxo Bank analyst Ole Hansen said.
Financial markets slipped sharply on Friday on fears the variant would disrupt the economic recovery from the two-year pandemic.
With new cases of the Omicron variant found in the Netherlands, Denmark and Australia, more countries have imposed travel restrictions. read more
"Gold is taking (its) cue from interest rate expectations," Hussein Sayed, chief market strategist at Exinity Group, said.
"Now markets expect only two rate hikes for 2022, down from three. The shift in rate expectations is helping gold gain some ground, but the move is insignificant so far."
Capping gold's moves, the dollar edged higher – making gold more expensive for overseas buyers – and equities regained some composure after sinking last week on fears that the new variant could bring fresh curbs.
Elsewhere, spot silver rose 0.3% to $23.20 per ounce.
Platinum gained 1.5% to $967.50, and palladium climbed 2.1% to $1,783.83.
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