The difference between yields on U.S. two-and 30-year debt narrowed to lowest level since November 2012 on speculation the Federal Reserve will raise interest rates next year while inflation remains restrained.
Generally, the real interest rates are negatively correlated with the gold price, i.e. the rising interest rates adversely impact the yellow metal, however, there are many objections to the use of such a simple model.
Treasuries fell, pushing 10-year note yields up from the lowest level in three weeks, amid speculation a strengthening employment market will keep the Federal Reserve on track to raise rates next year.
Treasury two-year notes fell for a second day, pushing the yield to the highest level in more than three years, after the Federal Reserve raised its estimate of the target rate for overnight loans between banks for 2015.