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By Bharat Gautam
(Reuters) - Gold prices eased on Thursday as a rebound in U.S. Treasury yields tempered bullion's safe-haven demand stemming from the Ukraine crisis and its potential impact on the global economy.
Spot gold was down 0.4% at $1,950.61 per ounce, as of 0502 GMT. U.S. gold futures were down 0.1% at $1,953.00.
Benchmark U.S. 10-year Treasury yields firmed after they fell from three-year highs on Wednesday. [US/]
U.S. bond yields have marched higher on expectations that the Federal Reserve will aggressively hike interest rates as inflation accelerates at its fastest pace in 40 years.
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Gold is highly sensitive to rising short-term U.S. interest rates and higher yields, which increase the opportunity cost of holding zero-yield bullion.
"As the critical level of $2,000 wasn't broken, people have probably decided to take profits... and move funds out to equities or even short-term treasury bills," said Brian Lan, managing director at dealer GoldSilver Central.
Lan said gold would look to consolidate in the near-term and is currently doing so at around $1,940-$1,960 per ounce.
Earlier this week, gold came within striking distance of the key $2,000 level as concerns around the Russia-Ukraine conflict and rising inflationary pressures increased safe-haven bids.
"Geopolitical risk and inflation pressure are currently the two primary drivers for the gold market. An aggressive Fed rate hike of 75 bps could be a short-term price damper, while elevated inflation due to supply shocks could mitigate the negative impact," ANZ research said in a note.
The dollar also strengthened after dropping in the previous session, making greenback-priced gold less attractive for other currency holders. [USD/]
Spot gold may test a resistance at $1,961 per ounce, a break above which could lead to a gain to $1,975, according to Reuters technical analyst Wang Tao. [TECH/C]
Spot silver dipped 0.6% to $25.07 per ounce, platinum dropped 0.7% to $980.00, and palladium slipped 0.8% to 2,431.81.
(Reporting by Bharat Govind Gautam in Bengaluru; Editing by Sherry Jacob-Phillips and Subhranshu Sahu)
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
