Investing.com – Gold prices fell to five-week lows as the dollar continued to advance amid a sharp uptick in Treasury yields.
Gold futures for February delivery on the Comex division of the New York Mercantile Exchange fell by $13.30, or 1.00%, to $1,316.20 a troy ounce.
The United States 10-Year rose to four-year highs sparking a move higher in the dollar, pressuring gold to five-week lows following news that the Senate agreed a budget deal.
Senate leaders reached a major budget agreement that would increase spending caps, Majority Leader Mitch McConnell said Wednesday.
Dollar-denominated assets such as gold are sensitive to moves in the dollar – A rise in the dollar makes gold more expensive for holders of foreign currency and thus, reduces demand.
Also weighing on the yellow metal was a tick lower in safe-haven demand amid easing geopolitical uncertainty following reports that German Chancellor Angela Merkel's Christian alliance and the Social Democrats (SPD) agreed a coalition deal, paving the way for a new government.
In other precious metal trade, silver futures fell 1.87% to $16.27 a troy ounce, while platinum futures fell 1.27% to $981.70.
Copper fell 3.07% to $3.09, while natural gas 1.85% to $2.71.