Gold prices slipped on Wednesday, as the dollar resumed climb after Federal Reserve officials reiterated the U.S. central bank’s resolution to maintain an aggressive policy stance to tackle soaring inflation.

Fundamentals

Spot gold was down 0.3% at $1,624.81 per ounce, as of 0132 GMT.

U.S. gold futures dipped 0.2% to $1,632.4.

The dollar index was up 0.3%, edging closer to a 20-year high touched on Monday. Benchmark U.S. 10-year Treasury yields rose to a 12-1/2-year high overnight.

Minneapolis Federal Reserve Bank President Neel Kashkari said on Tuesday U.S. central bankers are united in their determination to do what is needed to bring inflation down, and financial markets understand that.

Meanwhile, Chicago Fed President Charles Evans said the central bank will need to raise interest rates to a range between 4.50% and 4.75%.

Though gold is seen as a hedge against inflation and economic uncertainties, rate hikes have dented the non-yielding bullion’s appeal and pushed the dollar to multi-year highs.

The Fed will hike its key interest rate to a much higher peak than predicted two weeks ago and the risks are skewed towards an even higher terminal rate, according to economists polled by Reuters.

New orders for U.S.-manufactured capital goods increased more than expected in August, suggesting that businesses remained keen to invest in equipment despite higher interest rates, which could keep the economy on a moderate growth path.

Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell 0.28% to 940.86 tons on Tuesday from 943.47 tons on Monday.

Spot silver fell 0.9% to $18.26 per ounce, platinum was down 0.5% at $844.21 and palladium shed 1.4% to $2,058.44.