Gold Prices Steady as Lower Treasury Yields Offset Dollar Strength

GOLD - SYDNEY. Gold prices steadied on Tuesday, after getting within a stone's throw of the key $2,000 per ounce level in the previous session, as lower U.S. Treasury yields offset pressure from two-year highs in the dollar.

Spot gold held its ground at $1,977.61 per ounce, as of 0013 GMT. U.S. gold futures eased 0.4% to $1,979.30.

On Monday, gold prices climbed to $1,998.10 per ounce - their highest in more than a month - as the Ukraine crisis and inflation concerns lifted demand for bullion, before giving up most of those gains after the dollar and U.S. 10-year Treasury yields firmed.

The dollar steadied near a two-year high hit in the previous session, as investors braced for multiple half a percentage-point rate hikes from the U.S. Federal Reserve.

U.S. inflation is "far too high," St. Louis Federal Reserve Bank President James Bullard said on Monday as he repeated his case for increasing interest rates to 3.5% by the end of the year to slow what are now 40-year-high inflation readings.

While bullion is considered a safe store of value during times of political and economic crises, as well as a hedge against inflation, a firmer dollar makes greenback-priced gold less attractive for other currency holders.

Yields on the benchmark 10-year U.S. Treasury note eased off their highest level since December 2018 reached on Monday, limiting losses in zero-yield gold.

Spot silver was steady at $25.84 per ounce, platinum gained 0.3% to $1,012.86, and palladium dropped 0.1% to $2,436.03.