Gold prices were little changed on Thursday, as a surge in US Treasury yields following hawkish meeting minutes released by the Federal Reserve offset the precious metal's safe-haven demand amid rising cases of the Omicron coronavirus variant.
Spot gold was little changed at $1,810.59 per ounce by 0142 GMT. US gold futures fell 0.8 per cent to $1,810.00.
Fed officials said the "very tight" US labour market might warrant raising rates sooner than expected, as well as reducing the bank's overall asset holdings to tame high inflation, minutes of their December 14-15 policy meeting showed.
Benchmark US 10-year Treasury yields rose to its strongest level since April 2021, while 30-year yields climbed to more than two-month highs. Higher yields raise the opportunity cost of holding gold.
Some investors view gold as a hedge against higher inflation, but the metal is highly sensitive to rising US interest rates which increase the opportunity cost of holding non-yielding bullion.
Futures on the federal funds rate on Wednesday have priced in a roughly 80 per cent chance of a quarter-percentage-point rate hike by the Fed at its March meeting.
Making gold less appealing for other currency holders, the dollar cut losses after the Fed minutes.
The rolling seven-day average number of new Covid-19 cases in the United States hit 540,000, a new high for an eighth consecutive day on Tuesday. Hospitalisations of Covid-19 patients in the country have risen 45 per cent in the past seven days and stand at over 111,000, a figure not seen since January 2021.
Spot silver shed 0.1 per cent to $22.75 an ounce, platinum fell 0.2 per cent to $980.53, and palladium remained unchanged at $1,863.69.
Watch the latest DH videos:
Deccan Herald is on WhatsApp Channels| Join now for Breaking News & Editor's Picks