Gold hits 2-week low amid rising US yields, dollar

Gold hits 2-week low amid rising US yields, dollar

Gold prices slid to a two-week low on Wednesday on a stronger dollar and U.S. Treasury yields amid renewed global inflation concerns that could prompt aggressive monetary policy measures.

Spot gold was down 0.4% to $1,830.66 per ounce by 1147 GMT, after hitting its lowest since May 19 at $1,827.80. U.S. gold futures were down 0.9% at $1,832.50.

Rising real yields in the United States and continental Europe and a firm dollar are negative factors for gold, said analyst Peter Fertig at Quantitative Commodity Research. "Gold could see some support only if the central banks don't do their job properly to fight inflation."

The dollar index was up 0.2% lifted by higher Treasury yields. Markets have priced half-point interest rate rises from the Fed this month and next, though uncertainty lingers about the outlook beyond. U.S. President Joe Biden on Tuesday met with Federal Reserve Chair Jerome Powell to discuss historic inflation that is draining American wallets.

Bullion is considered a hedge against inflation and a safe haven during times of political and economic uncertainty. However, higher U.S. interest rates increase the opportunity cost of holding gold and boosts the dollar in which the bullion is priced. Euro zone inflation data was much higher