Gold soar, Dollar Declines Over Holiday Risk-On Rally

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Gold was up in Asia on Friday morning, while the dollar fell as Santa brought a “risk-on” rally ahead of the holidays. Gold futures rose 0.01 percent to $1,810.10 at 10:15 p.m. ET (3:15 a.m. GMT), staying above the $1,800 mark.

The dollar, which usually moves in the opposite direction of gold, fell slightly on Friday. Concerns about the impact of the omicron COVID-19 variant on the economic recovery boosted investors’ risk appetites, limiting gold’s gains.

On Thursday, the US Food and Drug Administration approved Molnupiravir, Merck & Co. Inc.’s (NYSE: MRK) COVID-19 pill, for emergency use. A laboratory study in Asia Pacific, however, found that two doses and a booster of Sinovac Biotech Ltd.’s vaccine did not produce enough neutralizing antibodies to protect against omicron.

On Thursday, China also closed down Xi’an to combat the latest COVID-19 outbreak in the western city. The city’s 13 million residents have been told to stay at home and designate one person to go out every other day for necessities, marking the most severe lockdown since the pandemic began in early 2020.

In other news, Japan’s national core consumer price index increased 0.5 percent year on year in November, according to data released earlier in the day. In addition, the country’s cabinet approved a record initial budget for the fiscal year beginning in April 2022.

Japan plans to spend JPY107.6 trillion yen ($941.26 billion) in total for the fiscal year ending March 2023, a 0.9 percent increase from the initial budget for the current fiscal year.