NEW YORK: Gold prices slipped nearly 2% on Tuesday as a firmer dollar, higher Treasury yields and hopes for a faster US economic recovery dampened demand for safe-haven bullion.

Spot gold was down 1.6% at $1,684.64 per ounce by 1:57 p.m. EDT (1757 GMT). Earlier in the session, bullion fell about 2% to its lowest since March 8 at $1,678.40. US gold futures settled 1.7% down at $1,686.

Benchmark US 10-year Treasury yields rose to a 14-month peak, bolstered by hopes of stronger growth and inflation ahead of US President Joe Biden’s multi-trillion-dollar infrastructure plan.

“The short-term drivers just appear to be becoming very bearish for gold,” said Edward Moya, senior market analyst at OANDA, pinning gold’s recent weakness on a firmer dollar and higher yields.

While gold is likely to see some pressure in the short-term, investors pricing in inflationary concerns could “eventually trigger a frenzy of gold buying,” Moya added.

The dollar index jumped to a more than four-month high, making greenback-denominated gold more expensive for holders of other currencies.

Higher US Treasury yields have threatened gold’s appeal as an inflation hedge as they increase the opportunity cost of holding bullion, which pays no interest.

Meanwhile, palladium gained 1.8% to $2,574.26, having earlier risen over 3% after sliding 5.5% in the previous session.

Palladium will likely remain a tight market in the coming years, keeping prices elevated well above $2,100 for at least the next two years, said Jeffrey Christian, managing partner of CPM Group.

But palladium’s widening premium over platinum could drive some autocatalyst demand substitution from palladium to platinum and limit palladium’s gains slightly, he added.

Both platinum and palladium are used in automobile catalytic converters to limit exhaust emissions. Silver fell 2.5% to $24.05 an ounce and platinum was down 1.8% at $1,154.89.