By Asha Sistla

(Reuters] – Gold prices remained steady as U.S. Treasury Yields hit multiyear highs on Tuesday following an aggressive inflation stance by Federal Reserve chairman. Meanwhile, an intensifying conflict with Russia and Ukraine supported the demand for the safe-haven material.

The price of an ounce stood at $1,936.82 by 0347 GMT. The U.S. was up 0.4% to $1,937.30

Jeffrey Halley (OANDA senior analyst) stated that there aren’t any new inputs which could materially affect the Asian gold price today. This leaves gold trapped between increased U.S yields and risk-aversion sentiment.

Jerome Powell, Fed Chairman, indicated that the U.S. central banking would hike interest rates to lower inflation by larger-than-usual amounts.

The benchmark 10-year Treasury Note yield rose above 2.3% in May 2019 for the first-time since May 2019. Meanwhile, the gap between two- and two-year rates flattened more. This is a possible sign of economic decline.

According to market analysts, sharp moves in U.S. Treasury Market (OTC:), are increasingly pointing toward a recession. This is because markets have doubted the Fed’s ability to plan a “soft landing” to help the economy, as it raises interest rates to battle inflation.

The opportunity cost to hold non-interest bearing gold at a lower yield and higher interest rates is likely to rise.

The slowing of gold’s decline was Ukraine’s statement Monday, that it will not follow Russian orders after Moscow demanded that it cease defending Mariupol.

Nicholas Frappell (global general manager, ABC Bullion) stated, “Ukraine’s conflict is likely to continue increasing supply-chain tensions. Inflation pressures will also increase, supporting gold.”

Automakers used palladium to make catalytic converters that reduce emissions. It fell 0.5% to $2572.69 an ounce.

Spot silver rose 0.5%, to $25.32 an ounce. Platinum gained 0.3% to $1.039.99