Investor demand for gold as a safe-haven asset is rising as the new COVID-19 variant discovered in South Africa remains in the media spotlight on Monday.

The new variant, labelled Omicron by scientists, has more than 50 mutations - the highest amount recorded in a COVID-19 variant so far. Omicron could have higher infectivity and evade the immune system better than Delta and other COVID-19 variants.

On Friday, stocks markets fell on the news of the new coronavirus strain. Many US, EU and Asian stocks tumbled as investors fled from risk assets.

Gold prices rose to the intraday high of $1,816.30 amid the selloff but retreated afterwards, as some traders sought to increase liquidity within their portfolios.

The asset finished the day in positive territory, gaining 0.1% or $1.20 and closing at $1.785.50 per ounce.

Despite being on the upside for two consecutive trading sessions, gold slumped over the week by 3.6%, pushed down by a stronger US dollar.

USDX grew steadily and gained 0.1% over the past week, matching the highs of the summer of 2020.

The rise was triggered by Jerome Powell's appointment as Fed chairman for the second term. Markets saw Powell's reappointment as a hawkish signal indicating further monetary tightening and a quicker interest rate hike.

The US dollar index lost 0.6% on Friday on new coronavirus variant concerns.

Today, markets are attempting to recover from Friday's volatile session, as panic over Omicron slightly eased.

Dr. Angelique Coetzee, the South African doctor who first spotted Omicron, noted that the patients with the new variant have relatively mild symptoms at the moment.

Raphael Bostic, President of the Federal Reserve Bank of Atlanta, hoped the current momentum in US economy would carry it through the next wave of the pandemic. Bostic also stated that further QE tapering would be inevitable.

ECB's president Christine Lagarde said the eurozone is currently better prepared to withstand the hit of the new wave of COVID-19 and its new strain than before.

New reported cases of Omicron were registered in the Netherlands, Denmark and Australia. The World Health Organization called for extreme caution and stated that estimating the severity of the new variant would take time.

Early on Monday, gold edged up by 0.4% to $1,793.2, pushed up by uncertainty over Omicron.

Concerns over the new COVID-19 variant also boosted demand for silver as a safe-haven asset. Spot silver rallied after the last week's 7% loss, gaining 1.1% and reaching the price of $23.38 per ounce early on Monday.

The precious metals market would be influenced by comments of the Federal Reserve chairman Jerome Powell, analysts say. If the Fed chairman expresses concern about Omicron, it could greatly boost prices in the short term.