“Gold prices fell amid rising government bond yields on expectations that the slow recovery in the US economy would allow the Fed to come to terms with higher inflation in the short term,” said Edward Moya, an analyst at OANDA. “Wall Street is a little more concerned about inflation, and given that a cut in stimulus from the Fed in December looks likely, the curve will become even steeper; and that should be negative for gold in the short term. "
“The precious metal could drop to $ 1,755 an ounce, and if that level is easily broken, the next move down could set a price target near the $ 1,700 level,” Moya said. "As long as the market ignores price pressures over the next few months, disinflationary forces around the world are likely to put an abrupt end to the upward movement in government bond yields, allowing many investors to continue buying gold."