Gold prices slid to 1-1/2 month low on Tuesday as the dollar tracked U.S. Treasury yields higher, denting demand for non-interest-bearing bullion.
Spot gold was down 0.6 percent at $1,739.62 per ounce while U.S. gold futures were down 0.7 percent at $1,739.55.
The dollar rose and the two-year U.S. Treasury yield surged to 18-month highs as investors bring forward expectations for Fed policy tightening.
Fed Governor Lael Brainard said on Monday that labor-market conditions may “soon” warrant a reduction in the pace of the central bank’s bond purchases.
New York Fed President John Williams also noted that moderating bond-buying may soon be warranted.
Fed Chair Jerome Powell is due to appear today with Treasury Secretary Janet Yellen at an oversight hearing on the government’s massive support programs passed to deal with the COVID pandemic.
Also, European Central Bank President Christine Lagarde is due to deliver opening remarks at the 2021 ECB Forum on Central Banking, via satellite at 8 am ET.
In remarks prepared for delivery to the Senate Banking Committee, Power said that inflation in the U.S. is elevated and could persist in the coming months before dropping back towards the Fed’s long-run 2 percent goal.