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Spot gold stayed relatively level compared to the previous session, down 0.1% at $1,795.72 per ounce by 11:55 a.m. ET. US gold futures declined 0.5% to $1,794.50 per ounce.

Risk aversion was evident across financial markets over the past few days, with Europe’s biggest countries introducing more restrictions to fight a surge in covid-19 infections. As a result, European stock markets tumbled amid a global sell-off in equities.

But moves in gold were likely to be remain muted, in part due to thinning liquidity into the year-end, analysts said.

Michael Hewson, chief market analyst at CMC Markets UK, told Reuters that the negative risk appetite on omicron worries, and US Treasury yields being low – which reduce the opportunity cost of holding bullion – are supportive for gold prices.

Omicron-led uncertainty could lead to a more dovish central bank narrative in 2022, while issues in Washington over the domestic investment bill and the risks around Ukraine are also boosting the metal’s appeal, said Stephen Innes, managing partner at SPI Asset Management.

However, gold prices are still on track for the first annual loss in three years as central banks cut pandemic-era stimulus to fight inflation. A faster taper of the US central bank’s bond-buying program positions it to start raising interest rates as early as March, according to US Federal Reserve Governor Christopher Waller.

“Gold has finally seen some buying as worries over rising inflation and the increasing spread of the virus halt the equity rally,” Madhavi Mehta, a senior analyst at Kotak Securities Ltd., said in a Bloomberg report.

“Still, prospects for Fed tightening have kept investors on the sidelines as evidenced by exchange-traded fund flows, and any major upside may be limited,” Mehta added. “Low trade participation near year-end may keep prices volatile, but anchored in the $1,780 to $1,800 an ounce range.”