Gold at lowest in nearly 2 weeks as bond yields, dollar weigh

Gold at lowest in nearly 2 weeks as bond yields, dollar weigh

Gold prices eased on Wednesday to their lowest in nearly two weeks, as expectations of an aggressive tightening of U.S. monetary policy buoyed the dollar and Treasury yields, denting the appeal of zero-yielding bullion.

Spot gold was down 0.2% at $1,946.92 per ounce by 0949 GMT, after hitting its lowest since April 8. U.S. gold futures fell 0.4% to $1,950.80. "We are seeing higher yields, we are still seeing much more hawkish rhetoric from certain central bankers within the Fed... That's taken some of the wind out of gold's sails and triggered the corrective move that was arguably due," said Craig Erlam, senior market analyst at OANDA.

On Tuesday, gold prices fell as much as 1.8% as hawkish comments from U.S. central bank officials, including St. Louis Federal Reserve Bank President James Bullard, propelled the dollar and 10-year Treasury yields to multi-year highs. The yield on 10-year Treasury Inflation-Protected Securities, or real yields, touched two-year highs on Wednesday, briefly rising into positive territory for a second straight day.

Gold is highly sensitive to rising U.S. interest rates and Treasury yields, which increase the opportunity cost of holding the non-yielding bullion while boosting the greenback in which it is priced. On the day, the