Investing.com - Gold fell on Wednesday, driven lower by a rising U.S. dollar and bond yields.
Comex gold futures for June delivery were down 0.86% to $1,321.60 a troy ounce as of 10:26 AM ET (14:26 GMT).
The price of bouillon was driven lower by the rise in the greenback. The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, rose 0.43% to 90.95.
Gold is denominated in the U.S. currency and becomes more expensive for holders of other currencies when the dollar rises.
Meanwhile U.S bond yields continued to increase. Bond yields have risen to their highest levels in four years, as inflation has added to expectations of continued rate hikes from the Federal Reserve.
The yield on the benchmark United States 10-Year Treasury note reached its highest level since January 2014 on Monday, at 3.017. The United States 2-Year note rose to 2.492, a level not seen since 2008.
Expectations of higher interest rates tend to boost the dollar by making the currency more attractive to yield-seeking investors.
Higher rates are a negative for gold as the precious metal, which does not pay interest, struggles to compete with yield-bearing assets when rates rise.
The precious metal is often sought by investors as a store of value in times of market turmoil and political uncertainty and tends to decline as investor confidence returns.
Elsewhere on the Comex, silver futures were down 1.07% to $16.525 a troy ounce. Among other precious metals, Platinum Futures fell 1.96% to $916.70, while Palladium Futures slumped 0.98% to $962.10 an ounce. Copper futures decreased 0.13% to $3.138 a pound.