Amid concerns that the Federal Reserve would continue to raise interest rates sharply, gold prices remained at a three-week low under pressure from the strengthening dollar and rising Treasury yields.
As of 00:49 GMT, spot gold was down 0.1% to $1,627.04 per ounce. At $1,624.98, prices earlier reached their lowest point since September 28.
U.S. gold futures were down 0.1% at $1,632.60.
The dollar index held steady, having risen 0.8% on Wednesday, while the benchmark 10-year Treasury yields hit a peak since mid-2008.
The Fed said on Wednesday in a report that showed businesses becoming more pessimistic about the future that economic activity in the United States had increased somewhat in recent weeks, despite being flat in some regions and declining in a few others.
The report may not do much to cool expectations for a fourth consecutive 75-basis-point rate hike next month given that the most recent data show inflation continuing to climb at more than three times the central bank’s 2% objective.
Even though gold is regarded as a hedge against inflation, rising interest rates raise the opportunity cost of keeping the worthless bullion on hand.
Data released on Wednesday revealed that consumer inflation in the euro zone was slightly lower in September than initially thought, but it was still quite high. This confirmed market expectations for further rate increases before the year is through.
Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell 6.08 tonnes on Wednesday, their biggest one-day outflow since July.
Spot silver fell 0.4% to $18.36 per ounce, platinum dropped 0.6% to $878.52 and palladium slipped 0.6% to $1,988.78.
