Gold prices slipped to a near three-week low today, as the renomination of US Federal Reserve Chair Jerome Powell fuelled bets of faster interest rate hikes, bolstering the dollar and Treasury yields.
Spot gold fell as much as 1.2% to its lowest since 4 November, and was last down 1% to $1,787.22 per ounce by 15.22pm GMT.
US gold futures dropped 1% to $1,788.40.
Caught in gold's slipstream, spot silver fell 3.2% to $23.40 per ounce, platinum dipped 4.2% to $968.95 and palladium shed 1.7% to $1,920.99.
Heaping further pressure, the dollar index steadied after hitting a 16-month peak and US Treasury yields firmed as news of Powell staying on as Fed chair increased expectations of a rate hike next year.
"Gold has been in a panic selloff over the last 48 hours and I would blame most of it on rising 10-year Treasury yields. As the yield curve gets steeper, gold futures do not respond kindly," said Phillip Streible, chief market strategist at Blue Line Futures in Chicago.
Investors are betting Powell will step up the pace at which the central bank is normalising monetary policy to better grapple with surging consumer prices.
Gold is seen as a hedge against inflation, but rising Treasury yields have challenged that status as they translate into a higher opportunity cost of holding bullion.
But it's "too early to write off gold", said Ross Norman, an independent analyst.
"Inflation still has legs to run, and there are Covid-19 restrictions in Europe once again. But the onus is on the bulls to prove their case and garner support, failing which the metal could drift lower again," Norman added.
