By Maytaal Angel
LONDON (Reuters) - Gold dipped on Tuesday, heading for a third straight day of losses as a rise in U.S. borrowing costs supported the dollar and overshadowed the impact of strife in Gaza.
Israeli troops shot dead dozens of Palestinian protesters on the Gaza border on Monday when the high-profile opening of the U.S. embassy to Israel in Jerusalem by the Trump administration raised tension to boiling point.
But gold investors were fixated on the dollar, which rose versus a currency basket as 10-year U.S. bond yields shot above 3 percent, sending borrowing costs higher in a number of other countries.
"We're up against bond yields, the dollar and the fact that rising oil prices have at this stage accelerated expectations for rate hikes in the United States, due to the risk of inflation."
Spot gold had dipped 0.2 percent to $1,309.99 per ounce by 0949 GMT.
U.S. gold futures for June delivery fell 0.6 percent to $1,309.70 per ounce.
A Federal Reserve official this week backed the case for further interest rate hikes in the United States, saying inflation had not yet reached the U.S. central bank's 2 percent goal in a sustained way.
Higher U.S. interest rates tend to boost the dollar and push up bond yields, making greenback-denominated gold more expensive for holders of other currencies and denting the appeal of non-yielding assets such as gold.
"We're seeing little sparks of interest on the back of (rising geopolitical tensions) but at the moment it doesn't look significant enough to raise concerns over the medium term, which support a more sustained level of safe-haven buying."
Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.17 percent to 856.17 tonnes on Monday.
Silver was down 0.4 percent at $16.43 per ounce.
Platinum was up 0.1 percent at $904 per ounce, while palladium fell 2 percent to $975.72 an ounce, after dropping to a more than one-week low at $964.
(Additional reporting by Apeksha Nair; Editing by Dale Hudson)
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)