Gold falls as rising yields and firm dollar pressure prices

Prices for Gold retreated on Thursday, surrendering earlier gains as a combination of rising U.S. Treasury yields and a robust dollar countered safe-haven demand. Spot prices fell 0.7% to $5,099.48 per ounce by 1448 GMT, after hitting an intra-day high of $5,194.59 earlier in the session. The geopolitical landscape remains tense as the military campaign involving the United States, Israel, and Iran entered its sixth day. Reports of intensified bombardment and threats of retaliation have kept the market on edge, particularly regarding energy supplies. These tensions have provided support for Brent Crude Oil prices, which in turn has stoked fears of persistent inflation. Bart Melek, the global head of commodity strategy at TD Securities, noted that the market is balancing inflationary risks against the pressure of higher yields. > The market is looking at higher oil prices and the potential for inflation, while higher Treasury yields usually arent great for gold. While gold is traditionally a hedge against long-term inflation, its appeal often diminishes when interest rates rise. The U.S. dollar index climbed 0.4%, increasing the cost of bullion for holders of other currencies, while 10-year Treasury yields reached a three-week peak. Despite these headwinds, Melek suggested that supportive fundamentals remain, citing expectations of a significantly higher deficit in the American economy and ongoing global uncertainty. Economic indicators from the Federal Reserve indicated that while prices continue to rise, employment levels have remained stable. Market participants largely expect the central bank to hold interest rates steady at the upcoming policy meeting on March 18. Other precious metals followed the downward trend. Silver declined 1.2% to $82.41 per ounce, while Platinum slipped 0.6% to $2,136.09. Palladium saw the sharpest drop among the group, falling 2.4% to $1,639.96.