By Bharat Gautam

(Reuters] – On Wednesday gold prices plunged to their lowest levels in two weeks due to a rising U.S. Dollar and Treasury yields.

At 0741 GMT, the dollar was at 0.4%, or $1,941.40, an ounce. This is its lowest price since April 8. The U.S. dropped 0.7% to $1.944.80.

Prices fell by 1.8% on Tuesday as the strength of the benchmark and dollar overshadowed the safe-haven flows into the metal.

Jeffrey Halley, OANDA Senior Analyst, stated that the U.S. Dollar is still strong today and China has declined to lower its 5-year and 1-year loan prime rates. It looks like there’s a long squeeze in Asia.

The dollar maintained its recent highs and made greenback-priced precious metal less desirable for those who hold other currencies. [USD/]

China surprised markets by keeping its benchmark lending rate steady Wednesday. Markets saw this as an indication of caution about rolling out additional easing measures in the face of slowing growth due to COVID-19 lockdowns.

U.S. Treasury yields remained near their multi-year peak as investors anticipated an aggressive Federal Reserve rate hike. [US/]

Rising U.S. short term interest rates and bond yields are extremely sensitive to gold. This increases the potential cost of non-yielding currency.

Gold was close to $2,000 an ounce on Monday but is now under pressure.

UBS analysts stated in a note that gold’s ability to protect multiple risks has helped underpin demand. This includes the conflict in Ukraine and rising inflation worldwide.

Spot silver fell 0.8% to $24.96 an ounce. Platinum eased 1.5% at $976.47. Palladium rose 0.3% up to $2,379.85