Omicron uncertainty could lead to more dovish cenbank - analyst European shares slide on virus surge Dec 20 (Reuters) - Gold prices were steady on Monday, hovering close to a three-week peak scaled in the previous session, as the spread of the Omicron coronavirus variant smothered appetite for riskier assets, lifting bullion"s safe-haven appeal. Spot gold was steady at $1,797.07 per ounce, as of 1140 GMT, while U.S. gold futures shed 0.4% to $1,798.00. In the previous session, prices hit their highest levels since Nov. 26. European stocks retreated amid a global sell-off in equities, with investors fretting over the spectre of tighter COVID-19 curbs hitting the global economy as cases of the Omicron variant surge. But moves in gold were likely to be remain muted, in part due to thinning liquidity into the year-end, analysts said. Negative risk appetite on Omicron worries, and U.S. Treasury yields being low - which reduce the opportunity cost of holding bullion - are supportive for gold prices, said Michael Hewson, chief market analyst at CMC Markets UK. But 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. read more Gold is considered a hedge against higher inflation and geopolitical uncertainties, but a U.S. Federal Reserve rate hike would increase the opportunity cost of holding gold, which pays no interest. European Central Bank policymakers meeting last week sought a greater acknowledgement of inflation risks but were rebuffed by the bank"s chief economist Philip Lane in an unusually robust debate. read more Spot silver was flat at $22.32 per ounce. Platinum fell 0.76% to $922.93 per ounce, and palladium dropped 2.87% to $1,730.53 per ounce. Reporting by Bharat Govind Gautam and Seher Dareen in Bengaluru; Additional reporting by Kavya Guduru; Editing by Pravin Char and Sherry Jacob-Phillips