Spot gold was last down 1% at $1,790.80 an ounce by 12:49 ET (1749 GMT), its lowest since Dec. 29, while U.S. gold futures dropped 1.9% to $1,791.20.
The primary focal point is the number of rate increases and how aggressive the Fed will be with its balance sheet runoff, which has put gold in a vulnerable position, said Ed Moya, senior market analyst at brokerage OANDA.
If the movement in Treasury yields goes a lot higher in the short term, that is going to be very disruptive for gold trade, Moya added.
Gold, a non-interest-paying asset, tends to fall out of favour among investors when interest rates increase.
The Fed minutes released on Wednesday showed officials had discussed shrinking the central bank's overall asset holdings as well as raising rates sooner than expected to fight inflation.
Benchmark 10-year yields rose to their highest level since March last year. [US/]
Gold and silver prices are pressured as markets attempt to squeeze in a fourth rate hike for 2022, TD Securities said in a note, adding that constraints to money supply growth should further sap appetite for all collectibles including silver coins.
Spot silver dropped 2.5% to $22.20, its lowest level since Dec. 16. Platinum fell 2.3% to $959.52 and palladium dipped 0.3% to $1,869.24.
(Reporting by Seher Dareen in Bengaluru; Editing by David Goodman)
By Kavya Guduru
