Spot gold fell 2.8% to $1,720.13 an ounce by 11:15 a.m. EST, on its way for a second straight weekly and monthly loss. US gold futures also declined 2.8%, down to $1,727.10 an ounce in New York.

“Rising inflation expectations as markets price in the reopening of developed market economies are pushing yields higher and pressuring gold,” OANDA senior market analyst Jeffrey Halley told Reuters.

Higher inflation normally boosts gold’s appeal as a safe haven asset, but it also lifts treasury yields, which in turn increase the opportunity cost of holding non-yielding bullion.

“The overall picture looks dire, gold is now in danger of a material move lower, if yields rise again,” Halley added.

“Gold is having a rough 2021 and the only thing that can right the ship is if central banks thwart the trajectory of bond yields,” said Edward Moya, also a senior market analyst at OANDA. “The Fed will have plenty of opportunities to stem surging Treasury yields, but for now it seems they can be a little more patient.”

Reflecting investor sentiment, holdings in the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, fell to their lowest since May 2020. It is estimated that $1.5 billion in funds had been withdrawn from the ETF within the span of one week.