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Gold prices inched higher on Wednesday to hold near the key $1,800/ounce psychological level amid falling Treasury yields. Lower bond yields reduce the opportunity cost of holding non-interest bearing gold.

Spot gold rose half a percent to $1,806.65 per ounce, after having hit its highest since June 17 at $1,814.78 on Tuesday. U.S. gold futures were up 0.7 percent at $1,807.05.

A fall in Treasury yields is providing support to the precious metal as investors await minutes from the Federal Reserve’s June meeting for more clues on its policy outlook.

Benchmark 10-year Treasury yields dropped to a new 4-1/2-month low as investors assessed risks to growth stemming from the infectious new COVID-19 delta variant in Asia, Latin America and parts of Europe.

The dollar index is in a quiet mode ahead of the release of Fed minutes. Any hawkish shift would be supportive for the greenback, while dovish tone from the Federal Reserve would be dollar-negative.


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