Gold prices fell around 1% to a near three-week low on Tuesday as the renomination of U.S. Federal Reserve Chair Jerome Powell fueled bets of faster interest rate hikes, bolstering the dollar and Treasury yields.
Spot gold fell 0.9% to $1,788.51 per ounce by 02:13 p.m. ET. U.S. gold futures settled down 1.3% at $1,783.80.
Caught in gold's slide, spot silver fell 2.8% to $23.49 per ounce, platinum tumbled 4.7% to $964.42 and palladium dropped 4.5% to $1,865.68.
Making gold expensive for holders of other currencies, the dollar index steadied, while U.S. Treasury yields firmed.
"Gold has been in a panic selloff over the last 48 hours and I would blame most of it on rising 10-year Treasury yields. As the yield curve gets steeper, gold futures do not respond kindly," said Phillip Streible, chief market strategist at Blue Line Futures in Chicago.
Investors are betting Powell will step up the pace at which the central bank is normalizing monetary policy to better grapple with surging consumer prices.
Powell and Treasury Secretary Janet Yellen are set to appear before the Senate Banking Committee next week.
Gold prices have fallen nearly $100 since scaling a five-month peak of $1,876.90 per ounce last week.
However, Ross Norman, an independent analyst, said it is "too early to write off gold".
"Inflation still has legs to run, and there are COVID-19 restrictions in Europe once again. But the onus is on the bulls to prove their case and garner support, failing which the metal could drift lower again," Norman added.
Gold is seen as a hedge against inflation, but rising Treasury yields have challenged that status as they translate into a higher opportunity cost of holding bullion.