Spot gold was down 0.4% at $5,169.02 per ounce, as of 1:33 p.m. ET (1733 GMT) after gaining in the previous session. U.S. gold futures for April delivery settled 1.2% lower at $5,179.10.
The U.S. dollar index inched up 0.4%. A stronger U.S. currency makes dollar-priced commodities more expensive for holders of other currencies.
“The gold market seems to be in a push-and-pull between safe-haven demand driven by the war and concerns over higher-for-longer interest rates,” said Peter Grant, vice president and senior metals strategist at Zaner Metals.
Gold is widely seen as a hedge against uncertainty and inflation, but becomes less attractive when interest rates are high since it is non-yielding.
Oil prices gained 4% as fresh attacks on ships in the Strait of Hormuz worsened supply disruption fears, and analysts said the International Energy Agency’s proposal to release oil reserves was inadequate to ease those fears.
Iran said the world should be prepared for oil to hit $200 a barrel. Its forces attacked merchant ships and fired at Israel and other targets across the Middle East.
Meanwhile, data showed the U.S. consumer price index rose 0.3% in February, in line with forecasts and above January’s 0.2% increase. CPI rose 2.4% in the year to February, also matching expectations. Now focus shifts to January’s delayed PCE price index data due on Friday.
Analysts at Standard Chartered noted it is not unusual for gold to experience downside pressure for several weeks amid a need for cash.
“We maintain our positive longer-term view and expect gold to resume its uptrend beyond near-term profit-taking,” they added.
Among other metals, spot silver fell 3.5% to $85.34 per ounce, spot platinum lost 0.8% to $2,183.10, and palladium slipped 1.4% to $1,631.59.