Gold falls on interest rate hike fears, bond yields rise

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

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

The dollar fell for the fourth session in a row, although it remained at high levels, which makes the dollar-denominated metal less expensive for buyers of other currencies.

Two sources familiar with the matter told Reuters that European Central Bank policymakers 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 10-year US Treasury bonds yield stabilized after two sessions of gains.

As for other precious metals, there was little change in silver in spot transactions, and it remained at $18.74 an ounce. Platinum settled at $874.61 an ounce. And palladium rose 0.5 percent to $ 1884.66 an ounce.