Benchmark 10-year U.S. Treasury yields touch 6-week peak Investors expect new coronavirus wave to be temporary- analyst Jan 3 (Reuters) - Gold prices fell more than 1% on Monday as a risk-on rally in equities pressured bullion, with investors shrugging off concerns around the impact of the Omicron coronavirus variant. Spot gold dipped 1.5% to $1,800.68 an ounce by 13:37 EDT (1837 GMT), set for its biggest one-day percentage decline in more than a month. U.S. gold futures settled down 1.6% at $1,800.10. Rising yields, a firmer dollar and improved risk sentiment are boosting equities, putting pressure on the gold market, said Bob Haberkorn, senior market strategist at RJO Futures. S&P 500 futures neared record levels as equity markets looked to extend a recovery from the pandemic shock into the new year. Benchmark 10-year U.S. Treasury yields rose to a six-week peak, dulling the appeal of non-yielding bullion. Despite surging coronavirus cases, the number of deaths and hospitalisations from the Omicron variant are comparatively low, leading many governments to stop short of imposing lockdowns. read more Haberkorn said investors expect the new coronavirus wave to be temporary. The dollar rose against a basket of major currencies, making gold more expensive for overseas buyers, tracking government bond yields as investors anticipate the U.S. Federal Reserve will stay on its path of interest rate hikes in 2022. Gold prices marked their biggest yearly fall since 2015 in 2021, ending the year down 3.6%. UBS analyst Giovanni Staunovo said rising U.S. interest rates and declining U.S. inflation over the course of 2022 could weigh on gold, forecasting a price of $1,650 at the end of the year. Some investors view gold as a hedge against higher inflation, but bullion is highly sensitive to rising U.S. interest rates, which increase the cost of holding the commodity. Silver dropped 1.9% to $22.82 an ounce, platinum fell 0.9% to $953.87 and palladium slid 3.8% to $1,819.61.