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Spot gold was down 0.2% at $1,928.52 per ounce by 0457 GMT. U.S.
gold futures were down 0.1% at $1,931.70.
"The more liquid something is, the less the volatility. And, if
markets are running away from risk... the dollar then becomes a
natural haven just because it is quite simply the most liquid
financial instrument in existence," said Ilya Spivak, a currency
strategist at DailyFX.
"Now in real terms, those yields are still negative once we
discount break evens. And I think that's why gold hasn't fallen
more significantly, but if this sort of repricing for a more
hawkish Fed continues and we do get positive real rates, I think
gold is going to look quite unattractive."
The dollar index was little changed after three straight
sessions of gains as talks of further sanctions against Moscow
increased. A stronger dollar makes gold less attractive for
other currency holders.[USD/]
The United States and Europe were planning new sanctions to
punish Moscow over civilian killings in Ukraine, and President
Volodymyr Zelenskiy warned more deaths were likely to be
uncovered in areas seized from Russian invaders.
U.S. two-year Treasury yields climbed to their highest level
since early-2019 and 10-year yields ticked higher on Monday.
Higher yields increase the opportunity cost of holding
non-paying bullion. [US/]
"During these uncertain times, gold remains supported as a
critical portfolio hedge that will shine during the most
challenging juncture when inflationary pressures remain strong
but growth slows," Stephen Innes, managing partner at SPI Asset
Management, said in a note.
Spot silver shed 0.2% to $24.45 per ounce, platinum fell 0.5% to
$981.88 and palladium rose 0.5% to $2,286.63.
(Reporting by Asha Sistla in Bengaluru; editing by Uttaresh.V)
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