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Update: Gold Retreats from Two-Week High as Dollar and Treasury Yields Rise

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(Updates prices in the second and final paragraphs.)

Gold prices retreated midafternoon Thursday, falling off a two-week high as the dollar and yields rose after the US reported a sharp drop in initial jobless claims last week while high oil prices continue to stoke inflation worries.

Gold for August delivery was last seen down $100.20, or 2.4%, to $4,051.70 per ounce.

The US Labor Department on Thursday reported 187,000 fresh jobless claims last week, down from a revised 209,000 claims a week earlier and under expectations for 212,000 new claims, according to MarketWatch.

Rising oil prices as fighting in the Middle East heats up is further stoking inflation fears. The US is continuing attacks on Iran and Yemen's Houthis are striking at tankers in the Red Sea, heightening worries central banks will need to raise interest rates to check prices.

The dollar moved higher following the data, a bearish signal for commodities priced in the currency. The ICE dollar index was last seen up 0.33 points to 101.46, the highest since July 1. Treasury yields were sharply higher, with the yield on the US two-year note last seen up 6.4 basis points to 4.366%, while the 10-year note was paying 4.706%, up 3.8 points.

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