Gold extended its decline heading into 2022, falling by more than 1% on Monday as a risk-on rally in equities pressured bullion, with investors shrugging off concerns surrounding the omicron coronavirus variant.

Spot gold dipped 1.6% to $1,799.50 an ounce by 12:15 p.m. EDT, set for its biggest single-day decline in over a month. US gold futures also fell 1.6% to $1,799.40 an ounce in New York.

S&P 500 futures approached record levels on Monday as equity markets looked to extend a recovery from the pandemic shock into the new year.

Benchmark 10-year US Treasury yields meanwhile rose to a six-week peak, drawing investors away from the non-yielding bullion.

Also pressuring gold by making it more expensive for overseas buyers, the dollar rose against a basket of major currencies, tracking government bond yields as investors anticipate the US Federal Reserve to stay on its path of interest rate hikes in 2022.

“Rising yields, a firmer dollar and improved risk sentiment are boosting equities, collectively putting pressure on the gold market,” Bob Haberkorn, senior market strategist at RJO Futures, told Reuters.

Bullion ended the previous calendar year down 3.6%, the biggest annual decline since 2015, as major central banks around the world started to dial back pandemic-era stimulus to fight inflation.

UBS analyst Giovanni Staunovo said rising US interest rates and declining 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 US interest rates, which increase the cost of holding the commodity, he said.

With major markets all closed for holidays, investors will look ahead to the release of minutes from the Fed’s latest meeting on Wednesday and the US nonfarm payrolls figures due Friday.