But with the Federal Reserve increasing its benchmark interest rate by 25 basis points on Wednesday, markets seem to be celebrating the return of the yield.
Gold prices edged up on Wednesday as the market waited for more clues on how many times the U.S. Federal Reserve will raise interest rates this year and on uncertainty over the outcome of Dutch elections.
Fed Chair Janet Yellen pointed to the growing faith in the economy's trajectory as the United States central bank raised rates for the second time in three months. Although inflation is "close" to the Fed's 2-percent target, it noted that goal was "symmetric", indicating a possible willingness to allow prices to rise at a slightly faster pace. The market is quite certain that it will increase rates at this meeting.
Earlier, the pan-European STOXX 600 index gained 0.4 percent, helped by energy and basic resource stocks.
The dollar fell 0.2 percent against a basket of key currencies, adding to Wednesday's steep slide after the Fed's decision.
The euro, meanwhile, fell against the dollar after a poll showed far-right anti-EU leader Marine Le Pen extending her lead over centrist Emmanuel Macron in the first round of France's presidential elections.
Sterling jumped after outgoing Bank of England policymaker Kristen Forbes unexpectedly voted for a rise in interest rates at the bank's March meeting.
Oil prices eased as support from a weaker dollar was offset by a stubbornly high level of United States inventories.
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It touched its lowest level in 3-1/2 months early this week on concerns about a supply glut in the United States, but data on Wednesday showing a small decline in stockpiles there helped lift prices.
MSCI's all-country world stock index gained 0.7 percent.
"Real yields were pumped up ahead of the announcement in expectation of a hawkish hike, instead we got a dovish hike with no change in the forward guidance and that has led to some recovery in gold today", Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen, said.
The euro rose to $1.0740 while the dollar fell to 0.9980 franc against the Swiss currency. "The reason for the rates rally in the aftermath was the 5-10 year inflation print which fell to a record low of 2.2 percent, which was the lowest level since the survey started in 1979", said Aaron Kohli, an interest rate strategist at BMO Capital Markets in NY, in a research note. France's CAC 40 lost 0.3% at 4,986.61.
The Benchmark 10-year Treasuries were last up 6/32 in price to yield 2.502 percent, from a yield of 2.524 percent late Thursday.
The metal built on those gains Thursday with April futures contracts on the Comex market in NY touching a high of $1,234.00 at the open, up 2.8% from yesterday's settlement level.
Global benchmark Brent added nearly 0.1 per cent to $51.77 a barrel, and was headed for a 0.8 per cent weekly gain. US gold futures settled up 0.3 percent at $1,230.20.