Gold drops to 1-week low after Fed minutes

Gold prices fell on Thursday, deepening losses for the second straight day, and hit a 1-week low, as the 10-year US Treasury bonds rallied following the Federal Reserve meeting minutes, which showed Federal Reserve officials are preparing to move quicker in raising interest rate than expected.

Gold prices fell 0.3% to the lowest since December 29 at $1,793.74, after opening at $1,810.59, and hit a day high at $1,811.50.

Gold lost 0.2% yesterday, weighed down by the Federal Reserve meeting minutes.

The 10-year US Treasury bond yield rose more than 2% today, rising for the fifth straight day, and hit a 9-month high at 1.744%, which weighs down on demand for gold and reduces the opportunity cost of holding non-yielding bullion.

This came as investors almost fully expect a US rate hike next March to tame the rising inflation risks in the US, following strong hints from last Fed's meeting minutes

The Fed members said the labor market is extremely tight, which might warrant a rate liftoff sooner, in addition to reducing asset holdings to ease high inflation.

Gold stocks at the SPDR ETF fell 0.32 metric tonnes yesterday, with the total at 979.99 metric tonnes.