Gold is also moving lower today as the dollar index continues to strengthen on the back of the Fed’s monetary policy stance. The precious metal trades above the $1,800 price mark, which is a critical support level.
Given that traders are nervous about the Fed's hawkish monetary policy stance, the current risk-off mode may force traders to hedge their risk by buying gold. Gold is considered a hedge against rising volatility and helps investors protect their wealth in times of market turmoil.
However, the uptick in Treasury yields on 10-year bonds, which are currently hovering around 1.733%, has dented the yellow metal's appeal to investors.
Oil
Crude oil prices continued their climb on Wednesday despite OPEC's decision to raise its output in coming months and coronavirus cases on the rise. A reason behind the price action could be that crude oil inventories data showed that oil stockpiles fell 2.1 million barrels.
However, investors should keep in mind that the fall could be because of tax incentives given to oil producers, which reduce their inventories before year-end. However, the FOMC minutes, which indicated that the Fed is likely to raise its policy rate sooner, capped gains for oil markets.