• Gold retreats beneath $2,400 as US bond yields rise.
• Israel braces for potential Hamas retaliation, elevating regional tensions.
• Asian central banks, including the People's Bank of China, hold off on physical Gold purchases.

Gold price retreats below $2,400 and erases previous gains on Wednesday late in the North American session, despite rising geopolitical tensions in the Middle East and expectations for a looser monetary policy by the Federal Reserve (Fed). The XAU/USD trades at $2,385, down 0.06%.

Geopolitical tensions remain elevated as Israel awaits Hamas retaliation due to the assassination of its leader, Ismail Haniyeh. US intelligence suggests the response could be delayed until late Thursday or Friday. Meanwhile, Egypt instructed all its airlines to avoid Iranian air space for a three-hour period on Thursday due to tension between Israel and Iran.

Given the backdrop, Gold’s losses were tempered by mood. Nevertheless, the rise in US Treasury bond yields weighed on the non-yielding metal and boosted the Greenback.

The US 10-year Treasury note is up seven basis points (bps) and yields 3.968%. The US Dollar Index (DXY), which tracks the performance of the American currency against the other six, aims up 0.27% at 103.20.