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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. [US/]
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 dollar hovered slightly below the more than
two-year peak touched in the previous session. [USD/]
From a technical point of view, $2,000 was a key level of
resistance and stopped the increase of gold prices, said Carlo
Alberto De Casa, external market analyst at Kinesis.
"A large majority of investors are also waiting for the Fed to
raise interest rates by 50 basis point."
On Monday, gold came close to the key level of $2,000 per ounce
but has since come under some pressure.
Spot silver fell 0.6% to $25.01 per ounce, and platinum dipped
1.7% to $974.01, while palladium rose 1.3% to $2,403.44.
(Reporting by Eileen Soreng in Bengaluru; Editing by Bernadette
Baum)
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