Gold prices decline on interest rate hike fears, higher yields

Gold prices fell on Wednesday as fears of monetary policy tightening and higher Treasury yields dispelled relief from the dollar’s decline.

By 0610 GMT, gold fell in spot transactions 0.3% to $1,706.85 per ounce. US gold futures fell 0.3% to $1,706 per ounce.

The US dollar dipped for the fourth consecutive session, although it remained at high levels, which makes the dollar-denominated precious metal less expensive for buyers of other currency holders, Reuters reported.

Two sources familiar with the matter told Reuters that European Central Bank policy makers are considering raising interest rates by 50 basis points more than expected at their meeting on Thursday to contain inflation rising to record levels.

The yield on the 10-year US Treasury bonds stabilized after two sessions of gains.