The new COVID-19 strain has kept market participants on their toes over the week. However, they have shrugged off fears, shifting their attention to stocks again. This is why gold has resumed the downward movement.

Concerns over the omicron strain have eased slightly at the end of this week as the WHO does not obtain data on how dangerous it might be.

As a result, risk appetite returned to markets. Many investors believe that the new variant is unlikely to pose a great threat to the global economy, analyst Chintan Karnani said.

The World Health Organization is not yet clear if the new Omicron coronavirus variant is more transmissible compared to other SARS-CoV-2 variants. Therefore, traders make decisions more intuitively, he stressed. Gold and other safe haven assets are not included in their short-term portfolio.

On Thursday, gold dived to a 7-week low. The asset ended the session on the New York Stock Exchange at $1,762.70, the lowest level since October 12. The difference from the previous close was $21.60, or 1.2%.

On Friday morning, the price of gold continues to move down. It may close the week on a negative note. During the week, gold faced strong bearish pressure due to uncertainty over the Fed's monetary policy.

On Tuesday, Jerome Powell said that at the next meeting, scheduled for December 14-15, the central bank would consider accelerating the pace of the QE tapering.

Gold as a safe-have asset managed to rise slightly amid fears over new strain. However, the hawkish rhetoric of Jerome Powell weakens bullish momentum, analyst Stephen Innes pointed out.

The odds that the Fed could complete the tapering of asset purchases in a shorter time are higher than ever before.

Yesterday, Atlanta Fed President Raphael Bostic said that it would be appropriate to end the central bank's bond-buying program by the end of March to allow the Fed to raise rates to deal with inflation.

In an interview with Reuters, US Treasury Secretary Janet Yellen also confirmed that the Fed's job to ensure that the current run of high inflation does not evolve into a damaging and long-lasting "wage-price spiral" like in the 1970s.

The US dollar and Treasury yields climbed following these comments. Thus, the US dollar index jumped to 96.138, while government bond yields totaled 1.455% against 1.433% on Wednesday. Gold nosedived following the strengthening of its rivals.

Additionally, the number of initial jobless claims report also weighed on gold prices.

Last week, the initial jobless claims increased by 28,000 and amounted to 222 ,000, which indicates the stabilization of the labor market.

The number of continuing jobless claims in the week ending November 20 decreased significantly. The indicator has reached a new pandemic low of 1.956 million. This is the lowest level of unemployment since March 14, 2020.