By Asha Sistla

(Reuters) – Gold prices rose Wednesday supported by a drop in the U.S. Dollar and Treasury yields. However, signs of progress at Russia-Ukraine Peace talks have weakened the metal’s appeal and limited its value as a safe-haven.

The metal was 0.2% higher at $1,922.65 an ounce as of 0744 GMT. This is after it hit its lowest level since February 28th. Its low point came on the back of hopes for a peaceful resolution to the conflict in Ukraine. U.S. rose 0.6%, to $1.928.80.

Matt Simpson, senior market analyst for City Index said that Russia has promised to cut down its “military operations” in Kyiv.

Ukraine responded with suspicion, while some Western governments worry that Moscow is preparing to escalate its attack in other areas of the country.

Simpson claimed that gold is a beneficiary of both bond and currency market trends.

Gold was less costly for those who hold other currencies, as the price of gold held at or near its previous session’s low. [USD/]

The benchmark U.S. 10-year yields fell from three-year highs. Lower yields reduce the chance cost of owning non-yielding bullion. [US/]

Simpson stated that the weaker dollar has supported gold and added, “bond prices rebounded yesterday from a critical level of support which helped push yields lower, despite the risk-on rally across equities.” That’s another support pillar for gold.

SPDR Gold Trust, which is the largest exchange-traded gold fund in the world (P:), saw its holdings fall 0.2% to 1,091.44 tonne on Tuesday. [GOL/ETF]

Spot gold rose 0.3% to $24.83/ounce while platinum rose 0.1%, reaching $983.78

Palladium lost 0.5% at $2.137.78 after falling more than two months ago to $2.032.97.

As Russia’s supply worries eased, the auto-catalyst-metal has fallen nearly 40% from its March 7 all-time high.