Omicron risks, tepid dollar lift gold's safe-haven appeal

* Gold lacks momentum to break out of current range -analyst

* Dollar loses ground on blow to Democratic spending plans

Dec 21 (Reuters) - Gold prices edged higher on Tuesday as a subdued U.S. dollar made bullion cheaper for holders of other currencies while the threat to global economy from a surge in the Omicron variant cases also lifted the metal's safe-haven appeal.

Spot gold was up 0.2% at $1,792.25 per ounce, as of 0556 GMT, while U.S. gold futures fell 0.1% to $1,792.90.

The U.S. dollar index was subdued, having lost ground overnight after a blow to Democratic spending plans in Washington, making bullion cheaper for overseas buyers.

Overall, commodities outperformed other assets this year as a recovery from the pandemic boosted demand though gold's poor showing dented investor appetite.

"While the (recent) announcement of the U.S. Federal Reserve's tapering was slightly negative for gold, it has seen some support due to worries over the Omicron variant," said Ajay Kedia, director at Kedia Commodities in Mumbai.

Bullion is often considered a hedge against higher inflation, but Fed's interest rate hikes may tend to curb inflationary pressures.

Many nations are on high alert as surging Omicron cases triggered tighter curbs in Europe and threatened to swamp the global economy ahead of the New Year.

However, "gold investors lack the stomach for any sort of losses still, as evident by recent rapid retreats on rallies above $1,800," said Jeffrey Halley, senior market analyst at OANDA, adding it lacked the momentum to break out of current range-bound trading.

Asian stocks rose in spite of a bruising Wall Street session overnight, as Chinese markets cheered Beijing's push to help troubled property firms, but worries over the virus surge loomed large.

While gold could see support in 2022 due to Omicron risks, gains would not be in the double-digits and be in the range of 7% to 8%, added Kedia.

Spot silver was flat at $22.24 per ounce, platinum fell 0.2% to $930.46, and palladium was steady at $1,749.80. (Reporting by Seher Dareen in Bengaluru; Editing by Shounak Dasgupta and Sherry Jacob-Phillips)