Meanwhile, the benchmark US 10-year Treasury yield rose to 1.74% for the first time since January 2020, helping to lift the dollar from a two-week low.
The US Federal Reserve on Wednesday said the US economy was on track for its fastest expansion in nearly 40 years, but the central bank pledged to keep its ultra-easy monetary policy stance despite expected inflationary pressure.
This message helped briefly curb the relentless rise of bond rates, which have been putting pressure on non-interest-bearing gold this year.
“Gold has, despite the outlook for higher inflation as the Fed allows the economy to run red hot, traded lower today as yields continue to climb,” Ole Hansen, head of commodity strategy at Saxo Bank A/S, said in a note to Bloomberg.
The Fed allowing inflation to rise should support a turnaround, “but first we need to scale $1,765 an ounce which has become a level that many are watching,” he added.
“(The Fed) is getting more optimistic and that doesn’t bode well for gold and suggests that the trend lower is likely to continue,” DailyFX currency strategist Ilya Spivak, told Reuters.
(With files from Bloomberg and Reuters)
