Gold prices tumbled more than 1% to their lowest level in three weeks on Wednesday as dollar and US Treasury yields rose and the Federal Reserve (central bank) rates raised interest rates, reducing the attractiveness of the low-yielding metal. .
By 1101 GMT, spot gold was down 1.2 percent to $1,632.73 an ounce, while U.S. gold futures were down 1.1 percent to $1,637.50.
The dollar index rose 0.6 percent, making gold more expensive for overseas buyers, while 10-year US Treasury yields reached a new 14-year high.
“Gold traders will target this year’s low of $1,620, which we saw just a month ago,” said independent analyst Ross Norman, noting Asia’s desire to buy more metal at lower prices.
Gold is generally seen as a hedge against inflation, but higher interest rates increase the opportunity cost of owning the unprofitable yellow metal.
On Tuesday, Minneapolis Fed Chairman Neil Kashkari said the US central bank may have to raise interest rates above 4.75 percent if core inflation continues to rise.
In other precious metals, silver fell 1.9 percent on spot to $18.4 an ounce, while platinum fell more than two percent to $888.04 and palladium fell 1.4 percent through 1984. 25 dollars.