Gold dips as Treasury yields advance on U.S. rate-hike prospects

Gold prices fell on Wednesday towards previous session’s one-week low as the prospect of aggressive rate hikes by the U.S. Federal Reserve sent benchmark Treasury yields to two-year highs, reducing the appeal of non-yielding bullion.

Spot gold XAU= was down 0.2% at $1,810.90 per ounce, as of 0352 GMT, after falling to a one-week low of $1,805 an ounce on Tuesday. U.S. gold futures GCv1 dipped 0.1% to $1,810.80.

Gold is considered an inflationary hedge, but higher interest rates tend to weigh on the precious metal.

Traders await the Fed meeting on Jan. 25-26, expecting a more aggressive tone in tackling unabated inflation, which is the highest in nearly 40 years at 7%.

Spot silver XAG= dipped 0.2% to $23.41 an ounce, platinum XPT= fell 0.8% to $973.64, and palladium XPD= was down 0.4% at $1,889.46.