Gold dips as stronger dollar, yields dent appeal

Gold dips as stronger dollar, yields dent appeal

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Gold eased on Wednesday as hawkish comments from U.S. Federal Reserve officials boosted the dollar and Treasury yields to multi-year highs, denting the safe-haven metal's appeal.

FUNDAMENTALS

* Spot gold was down 0.2% at $1,920.87 per ounce, as of 0114 GMT. U.S. gold futures fell 0.3% to $1,920.90.

* The dollar scaled a near two-year peak as Fed officials pushed for a quick reduction in the central bank's bloated balance sheet, with one of them expressing openness to hefty rate increases of half a percentage point.

* A stronger dollar makes gold less attractive for other currency holders.

* Fed Governor Lael Brainard said she expected a combination of rate increases and a rapid balance sheet runoff to bring U.S. monetary policy to a "more neutral position" later this year, with further tightening to follow as needed.

* The Fed will release on Wednesday minutes of its March meeting that could provide details on its plans to reduce its bond holdings.

* U.S. Treasury yields hit multi-year highs on Wednesday as traders focused on the Fed's plan for unwinding its balance sheet, with longer-term yields moving more quickly and partly reversing some of the recent inversions in the U.S. curve.

* The United States and its allies were