Gold Falls as Hawkish Fed Minutes Boost Bond Yields
Gold retreated back under the US$1,800 mark early on Thursday as bond yields rose to the highest since April 2021, following the day-prior release of minutes from the last meeting of the Federal Reserve’s policy-making committee showed the central bank is preparing to tighten monetary policy and could begin hiking interest rates as soon as March.
Gold for February delivery was last seen down US$34.90 to US$1,790.20 per ounce, according to market data.
The drop came after the minutes of last month’s meeting of the Federal Open Market Committee released on Wednesday showed policymakers favour cutting back on its bond holdings this year and begin raising interest rates as the economy recovers from the pandemic.
The measures are seen as bearish for gold since the metal offers no yield as the prospect of higher rates boosts the value of interest-paying securities.
The dollar was flat early on Thursday, with the ICE dollar index last seen unchanged at 96.18 points. The yield on the U.S. 10-year note was up 2.2 basis points to 1.728%, near the highest in nine months. # Gold Falls as Hawkish Fed Minutes Boost Bond Yields
