Gold prices extended losses to hit their lowest level in a week on Wednesday as US Treasury yields and the dollar strengthened on expectations that interest rates are likely to remain high.

Spot gold was subdued at $1,925.70 per ounce by 0313 GMT, after posting its biggest one-day loss since Aug. 1 on Tuesday.

US gold futures dipped 0.1% to $1,951.

The US dollar hovered near six-month highs hit on Tuesday, while 10-year bond yields were at over one-week highs as markets weighed cues on interest rates.

A stronger dollar makes gold expensive for other currency holders.

Federal Reserve Governor Christopher Waller said the latest round of economic data was giving the US central bank space to see if it needs to raise interest rates again.

“Fed’s guidance for policymaking to be on a meeting-by-meeting basis has kept bets of additional tightening in November/December alive,” said Yeap Jun Rong, a market strategist at IG.

Additionally, a jump in oil prices does not provide much reassurance for the global inflation outlook and further convinced investors of a high-for-longer rate view, he said, adding that the US CPI data next week will determine Fed’s rate outlook over the coming months.

Higher US interest rates and Treasury bond yields raise the opportunity cost of holding gold, which does not earn any interest.

A raft of surveys on Tuesday showed global business activity largely slowed further last month, spurring demand for US dollar as a safe haven rather than gold.

SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.1% on Tuesday.

Elsewhere, spot silver was steady at $23.53 per ounce, platinum dipped 0.3% to $923.16 and palladium was up 0.1% at $1,213.46.