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Gold futures edged slightly higher Wednesday morning, staging a tenuous rebound on the session as the dollar traded flat but yields for government bonds climb, all factors that could prove a headwind for bullion.
The most active February gold contract
GCG22,
GC00,
was trading $2.30, or 0.2%, higher at $1,787.50 an ounce, following a 0.5% decline on Tuesday, which contributed to a monthly decline of 0.4% in November, according to Dow Jones Market Data.
Financial markets have been whipsawed by concerns about the omicron variant, which may have caused some selling of safe-haven metals, presumably, to meet margin calls.
Federal Reserve Chairman Powell on Tuesday surprised market participants by testifying in front of a Senate Banking Committee that speeding the tapering of monthly asset purchases when policy makers meet later this month could be warranted amid the new strain of the coronavirus.
Powell is slated to deliver a second day of testimony before lawmakers on Wednesday. Monetary policy makers meet on Dec. 14-15 for their final rate-setting gathering of 2021.
On Wednesday, the dollar was trading slightly higher, as gauged by the ICE U.S. Dollar Index
DXY,
which was at 96.024. Meanwhile the 10-year Treasury note yields
TMUBMUSD10Y,
around 1.48%, up from 1.44% at 3 p.m. Eastern Tuesday.
Richer yields can undercut appetite for bullion, as can a strengthening of the dollar which gold and other precious metals are priced in.
Meanwhile, in economic data, Automatic Data Processing Inc.
ADP,
indicated that private-sector employers added 534,000 jobs in November, better than a median forecast of 506,000 from economists surveyed by Dow Jones but down from the previous reading in October of 571,000.
