Print

Bullion had dropped below $1,700 an ounce as central banks globally raise interest rates to combat inflation, dulling the allure of the non-interest bearing asset.

A deluge of corporate debt offerings and a stronger-than-expected gauge of service-sector activity saw Treasury yields advance Tuesday. This helped buoy the greenback against almost all of its major developed-market counterparts, and spurred bets for another 75 basis-point Fed hike.

“Gold is back in the danger zone as global bond yields are skyrocketing,” said Edward Moya, senior market analyst at Oanda Corp. “Central banks seem like they will be aggressive with front loading rate hikes right now. It could get ugly quickly if gold breaks below the $1,690 level as there isn’t much support until $1,650.”

Spot gold was little changed at $1,701.59 an ounce as of 12:57 p.m. in London, after dropping 0.6% in the previous two days. The Bloomberg Dollar Spot Index hit an all-time high. Silver and palladium advanced, while platinum was steady.

Traders will also be monitoring the European Central Bank’s policy decision Thursday. Money markets scaled back rate-hike expectations amid mounting concerns about the health of the region’s economy.