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Gold prices climbed for a second time in three days on Wednesday but the rebound was capped at the mid-$1,800 levels as those bidding up the precious metal warily watched the U.S. bond market on fear of another damaging yields-spike.

Gold for February delivery on New York’s Comex settled up $10.70, or 0.6%, at $1,854.90 an ounce after an intraday high at $1,862.70.

The yield on the U.S. 10-Year note slid for a second day in a row, sliding a cumulative 2.6 percent for this week, after last week’s 22% jump to March highs. The yield itself was at 1.09 on Wednesday, versus this week’s high of 1.187.

The drop in yields came amid market talk that the Federal Reserve might not resort to faster than expected tapering of Covid-19 stimulus efforts. Such tapering could have put pressure on the Fed to raise interest rates, now at near-zero, faster than expected.

Last week’s unexpected spike in yields, along with a rally in the battered U.S. dollar, led to a 3% rout in gold futures for the week ended Jan. 8, pulling them down from highs above $1,960.

Despite Wednesday’s climb down in yields, the Dollar Index remained strong, limiting gold’s rebound. Those long the yellow metal also appeared restrained by concerns that the 10-year note could put in another resurgent performance later in the week.

“Fed policy makers have eased concerns about a taper tantrum which has taken the edge off yields and, in turn, the pressure off gold prices,” said Craig Erlam, analyst at New York’s OANDA. “Whether that will lead to a sustained decline in yields or not is another thing. A move back below 1% on the 10-year could be a positive sign for gold, which has a lot of lost ground to make up after it crumbled last week.”

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