Rising dollar and bond yields push gold prices lower

Gold prices fell on Tuesday, pressured by rising U.S. Treasury yields and a firmer dollar, as investors await further clues on the Federal Reserve’s interest rate hike schedule in your meeting next week.

Spot gold was down 0.5% at $1,809.91 an ounce at 10:48 GMT. US gold futures fell 0.4% to $1,809.40 an ounce.

“Despite the rising trend in bond yields, somehow gold is holding above the $1,800 threshold for the time being”said Han Tan, chief market analyst at Exinity.

Global markets have all eyes on the Fed meeting on January 25-26, after central bank officials suggested they may decide to start raising interest rates in March to curb persistent inflation.

Gold is considered a hedge against inflation, but at the same time it is highly sensitive to rate increases in the United States because they raise the opportunity cost of holding bullion for non-dollar investors.

The Bank of Japan raised its inflation forecasts on Tuesday for the fiscal year that starts in April, saying risks to the outlook for rising consumer prices were balanced.

Among other precious metals, silver was down 0.9% at $22.79 an ounce; while palladium fell 0.7% to 964.41 an ounce; and platinum was up 0.2% at 1,878.31 an ounce.