The yields are in the middle of their recent range after falling from a one-month high of 1.379% on Aug. 12, while holding above a six-month low of 1.127% reached earlier this month.
Chinese blue chips shed 3.2% in the biggest daily decline since March, as the education and property sectors were battered due to concerns over tighter government rules.
Spot gold rose 0.3pc to $1,781.77 per ounce by 12:48 pm EDT (1648 GMT), after jumping to $1,794.86, its highest level since June 18. U.S. gold futures gained 0.4pc to $1,782.90.
Weakening physical demand and slowing speculative flows into gold, both of which began before the Fed meeting, could also help to drive a further pullback, Ghali added.
The Treasury Department announced auctions next week for $58 billion of three-year notes, $38 billion of 10-year notes, and $24 billion of 30-year bonds.
The Dow Jones Industrial Average rose 120.79 points, or 0.35pc, to 34,585.43, the S&P 500 gained 13.23 points, or 0.31pc, at 4,214.11 and the Nasdaq Composite added 61.48 points, or 0.45pc, at 13,797.76.
Barclays estimates that its duration index extends out 0.13 years, versus the long run average of 0.09 years, according to Rupert, which means asset managers need to buy Treasuries to hit that index.
U.S. Treasury yields rose, translating into increased opportunity cost of holding non-yielding gold, on reports that President Joe Biden will announce on Friday a $6 trillion budget for 2022.
The benchmark 10-year Treasury yield fell to its lowest level since May 10 at 1.564pc following the auction. It was last down 4.1 basis points at 1.5672pc.
Spot gold rose 0.3pc to $1,784.23 per ounce by 1:50 p.m. EDT (1750 GMT), after falling about 0.8pc on Tuesday. U.S. gold futures settled up 0.5pc at $1,784.30.
Dovish Federal Reserve minutes released on Wednesday, which reiterated that the U.S. central bank was in no rush to raise interest rates, also weighed on Treasury yields.
The central bank ramped up buying of sovereign bonds after a surge in U.S. Treasury yields lifted borrowing costs in the bloc and threatened Europe's tentative recovery.
All three major U.S. stock indexes gained some ground and the S&P 500 and the Dow were last in positive territory, with economically-sensitive small caps and transports lagging.
Yields on the front end to the so-called belly of the curve were down, while those on the very long end were firmer. U.S. 10-year yields, however, dropped to a two-week low.
Italy started the process of selling new 50-year and 7-year bonds via a syndicate of banks on Wednesday, having flagged the new issues the previous day.
Spot gold was up 0.8pc at $1,742.78 an ounce by 11:03 a.m. EDT (1503 GMT) after hitting its highest level since March 25 at $1,744.30. U.S. gold futures gained 1pc to $1,745.20.
Gold is seen as a hedge against rising inflation, but firmer Treasury yields, which translate into a higher opportunity cost for holding bullion, have challenged that status.
Demand was evident at the long end of the curve with the 10-year yield last down 1.4 basis points at 1.710% after rising to a 14-month high on Tuesday.