Gold prices fell on Wednesday as the
dollar recovered slightly, piling pressure on greenback-priced
bullion along with firm Treasury yields and an aggressive
inflation stance by the US Federal Reserve chief.
Spot gold dropped 0.4% to $1,808.08 per ounce, by
0329 GMT. US gold futures slipped 0.6% to $1,807.10.
Gold has been consolidating since the end of last week but
the overall direction is down, towards about $1,750, said Ilya
Spivak, a currency strategist at DailyFX. “The question is when
do we find fresh momentum to take us there?” Spivak said.
The dollar edged higher after a three-session slide,
increasing the appeal of gold for investors holding other
“Gold’s very focused on rates and the outlook for monetary
policy, especially in the US,” Spivak said, adding that the
dollar was not done rallying.
Fed Chair Jerome Powell on Tuesday pledged that the US
central bank would ratchet interest rates as high as needed to
kill a surge in inflation that he said threatened the foundation
of the economy.
Benchmark US 10-year Treasury yields steadied after a
sharp rise in the previous session, hurting demand for
The Fed has raised its benchmark policy rate by
three-quarters of a percentage point this year, and is on track
to increase it again in half-percentage-point increments at its
next two meetings in June and July.
Although seen as an inflation hedge, bullion is sensitive to
rising US short-term interest rates and bond yields, which
increase the opportunity cost of holding it.
Spot silver fell 0.7% to $21.46 per ounce, platinum
dipped 0.6% to $945.37, and palladium eased 1% to
(Reporting by Bharat Govind Gautam in Bengaluru; Editing by