Prices had dropped 1.9% on Thursday as benchmark U.S. Treasury yields hit their highest since the pandemic began, lifting the dollar. Higher inflation boosts gold but also lifts Treasury yields, which in turn increase the opportunity cost of holding non-yielding bullion. Reflecting investor sentiment, holdings in the world's largest gold-backed exchange-traded fund, SPDR Gold Trust , fell 0.6% on Thursday to its lowest since May 2020.