Gold firms above $1,800, set for second weekly rise

New York (Dec 23) - Gold prices edged higher on Thursday in thin, yet supportive, year-end trading en route to a weekly gain, although an improved risk appetite capped bullion's rise.

Spot gold rose 0.2% to $1,807.49 per ounce by 0944 GMT, U.S. gold futures climbed 0.3% to $1,808.30.

Thin trading and Christmas buying are keeping gold above the $1,800 level, said Michael Langford, director at corporate advisory AirGuide. He added that the rise of risk-on investments ahead of Christmas, called a "Santa Claus rally", was creating a bit of a short-term positive for the metal.

Global shares extended a recent rally on Thursday, while safe-haven bonds and currencies eased as markets welcomed signs that the Omicron variant of the coronavirus might be less severe than feared, as well as robust U.S. economic data. 

"The main driver for gold moving again above the $1,800/ounce mark are rising U.S. inflation expectations as gauged by the breakeven," said UBS analyst Giovanni Staunovo.

The dollar index, on course for a weekly dip, recovered slightly but stayed near a one-week low against riskier rivals, making gold less appealing for holders of non-U.S. currencies.

Helped by the subdued dollar, gold has so far added about 0.5% in a week truncated by the Christmas-eve market holiday on Friday, in what could be its second straight weekly gain.

"Gold faces technical resistance at $1,815 and $1,826, with geopolitical risks ahead potentially keeping gold supported, despite the tapering narrative," said Nicholas Frappell, a global general manager at ABC Bullion. 

Spot silver gained 0.3% to $22.83 per ounce, and platinum climbed 0.3% to $967.75, rising 2.1% and 4.3% respectively so far this week, and on course for their best weekly showing in six.

Palladium dropped 0.3% to $1,876.23, but climbed 5.3% for the week.

Reuters