Gold inched lower on Wednesday as the dollar gained some ground, while the U.S. Federal Reserve’s commitment to tightening its monetary policy also weighed on zero-yield bullion’s appeal.

Spot gold was down 0.1% at $1,650.02 per ounce, as of 0317 GMT, while U.S. gold futures
were flat at $1,654.80.

The dollar index
ticked 0.1% higher, having hit its lowest level since Oct. 6 on Tuesday.

“Market participants may want to see a clearer end to Fed’s rate hikes before restoring some confidence in gold prices,” IG market strategist Yeap Jun Rong said, adding given upside risks to inflation, monetary tightening seems far from over.

“That will keep gold prices locked in an overall downward trend for now, with any rallies running the risks of being eventually sold into.”

Adding to Fed’s hawkish rhetoric, Minneapolis Fed President Neel Kashkari said on Tuesday the U.S. central bank may need to push its benchmark policy rate above 4.75% if underlying inflation does not stop rising.

The Fed is widely expected to deliver a fourth straight 75-basis point rate hike when it meets in November, and traders of futures contracts tied to the policy rate are betting on another oversized hike in December as well.

While gold is generally seen as a hedge against inflation, higher interest rates increase the opportunity cost of holding non-yielding bullion.

Global delegates at London Bullion Market Association’s annual precious metals conference in Lisbon predicted that gold prices would rise to 1,830.50 an ounce in a year, up from around $1,650 on Tuesday.

Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell by 0.29 tons on Tuesday.

Spot silvereased 0.3% to $18.70 per ounce, platinum was flat at $907.38 and palladium rose 0.4% to $2,022.13.