Gold is stable but continues to be pressured by expectation of rate hikes

Gold prices were almost unchanged on Wednesday, although they were pressured by high US bond yields and expectations of tighter monetary policy from the Federal Reserve next year.

Spot gold was trading at $ 1,793.62 an ounce at 1307 GMT, little changed on the day and after erasing the losses it marked at the beginning of the session. Gold futures in the United States were down 0.4% at $ 1,786.00 an ounce.

“Markets are embracing a greater likelihood of interest rate hikes by 2022 … (with) some traders betting the Fed could raise rates twice next year”Said Xiao Fu, head of commodity markets strategy at Bank of China International.

As investors await the meeting of the European Central Bank (ECB) on Thursday and the decision of the Fed’s monetary policy panel on November 3, the market remained quiet on Wednesday, he added.

Meanwhile, 10-year US Treasury yields were trading above 1.6%, increasing the opportunity cost of holding gold as an asset.

Among other precious metals, spot silver was down 0.9% to US $ 23.92 an ounce, while platinum was down 0.56% to US $ 1,021.99 an ounce; and palladium fell 1.4% to $ 1,982.98 an ounce.