- U.S. 10-year Treasury yields hit multi-year highs
- Oil rises, adding to previous day's 7% surge
- Gold taking Powell's comments relatively well - analyst
March 22 (Reuters) - Gold prices fell on Tuesday, pressured by the U.S. Federal Reserve head's hawkish approach to tackling inflation, which lifted Treasury yields and the dollar.
Spot gold was down 0.5% to $1,925.83 per ounce by 1243 GMT. U.S. gold futures fell 0.2% to $1,925.80.
Fed Chair Jerome Powell said on Monday the central bank must move "expeditiously" to raise interest rates to rein in lofty inflation, possibly "more aggressively", to keep an upward price spiral from getting entrenched.
The yield on the benchmark 10-year U.S. Treasury note hit its highest since May 2019, also pressuring non-interest yielding gold, as traders wagered on big rate hikes from the Fed through the rest of the year.
Additionally, the dollar index was up 0.1% against its rivals, making gold more expensive for holders of other currency.
Gold prices eased due to the precious metal’s inverted correlation with the U.S. dollar, ActivTrades senior analyst Ricardo Evangelista said in a note.
"The greenback strengthened as the 10-year Treasury yield reached 2.3% for the first time since 2019," he said.
However, gold is taking Powell's comments relatively well due to support from an overnight spike in crude oil prices, which is inflationary and hurts growth, said Saxo Bank analyst Ole Hansen.
Analysts have also said economic and political risks linked to Russia's invasion of Ukraine would continue to be closely monitored by the gold market, with any big developments likely to trigger sharp price action in either direction.
Rising gold exchange-traded fund holdings show that despite day-to-day price fluctuations, asset managers are moving back into gold to diversify, and as a hedge against inflation and an economic downturn, Ole Hansen added.
Spot silver fell 1.1% to $24.91 per ounce and platinum dropped 1.5% to $1,021.39. Palladium dipped 2.2% to $2,527.16 per ounce.
Reporting by Bharat Govind Gautam in Bengaluru; Additional reporting by Seher Dareen; Editing by Bernadette Baum and Jan Harvey