Gold prices steadied on Wednesday as a weaker dollar helped offset pressure from rising U.S. Treasury yields and growing appetite for riskier assets.

Spot gold was flat at $1,804.56 per ounce. U.S. gold futures settled down 0.3% at $1,805.80.

The dollar index fell 0.2% to a near one-month low against its rivals, making gold less expensive for other currency holders.

 

Earlier in the day, gold prices fell nearly 1% to a one-week low as benchmark 10-year yields rose to their highest level since Nov. 29, while Wall Street extended gains.

“Risk appetite might be a little stronger today,” said Peter Mooses, a senior market strategist at RJO Futures, adding that the pullback might not be long term and just last for a couple of days amid uncertainties around the Omicron variant cases.

Gold prices are likely to hover around the $1,800-mark for the first quarter in 2022, Mooses said, and that wider price ranges could be seen if news around the Omicron variant worsens.

The average number of daily confirmed coronavirus cases in the United States hit a record high of 258,312 over the last seven days, a Reuters tally showed on Wednesday.

“With room for inflation to continue its consistent rise on the back of festive buying pressures and constricted supply chain bottlenecks, spot gold could see another move higher before the hawkish tilt from most major central banks weigh negatively on the yellow metal next year,” said DailyFX analyst Warren Venketas.

Some investors view gold as a hedge against higher inflation that could follow stimulus measures, but higher Treasury yields dull some of the appeal of the non-yielding commodity.

Gold is on track for the biggest yearly decline since 2015, having fallen nearly 5% so far this year.

Meanwhile, spot silver was down 0.8% at $22.80, platinum dropped 0.7% to $968.95 and palladium shed 0.6% to $1,977.60.