Gold prices witnessed a decline today, Wednesday, amid the rise of the dollar and Treasury yields, after optimistic economic data strengthened expectations that the Federal Reserve (the US central bank) will continue to sharply raise interest rates.

Gold in spot trading fell by 0.5 percent to $1692.99 per ounce by 03:30 GMT, after earlier dropping to its lowest level in a week.

US gold futures dropped 0.6 percent to $1703.30.

Dollar Rise

Strong US services sector data contributed to the rise in the dollar price, as the dollar index jumped to its highest level in 20 years, making gold more expensive for buyers abroad.

US 10-year Treasury yields increased to their highest levels since June 16 amid expectations that the Federal Reserve will continue to raise interest rates. The rise in yields increases the opportunity cost of holding non-yielding gold.

The Federal Reserve is expected to raise interest rates by 75 basis points on September 21. The US central bank has raised interest rates by a total of 225 basis points since March to curb rising inflation.

Regarding other precious metals, silver in spot trading plunged 1.1 percent to $17.85 per ounce, platinum fell one percent to $844.43, and palladium dropped one percent to $1985.25.