Gold prices showed signs of recovery from early losses on Tuesday, yet remained firmly within a bear market. The metal's appeal continued to be undermined by a strengthening US dollar and elevated US Treasury yields. Spot gold was last quoted at $4,370.29 per ounce, down 1%. Gold futures for April delivery were at $4,371.50 per ounce, declining 0.8%. The US Dollar Index, which measures the greenback against a basket of major currencies, climbed 0.4% on Tuesday. A stronger dollar increases the cost of dollar-denominated gold for holders of other currencies, thereby reducing its attractiveness. Since hitting a record high of $5,594.82 per ounce in late January, spot gold has fallen by a cumulative 21%. Last week, prices plunged nearly 10%, marking the worst weekly performance since September 2011. Concurrently, the Dollar Index has risen approximately 3% since the onset of the Iran conflict. Market observers attribute the decline to a combination of macroeconomic factors and positioning-driven dynamics. "Although gold initially rose on safe-haven demand following the outbreak of the Iran conflict, prices have retreated recently," said Rajat Bhattacharya, Senior Investment Strategist at Standard Chartered, via email to CNBC. "This pattern is not uncommon during periods of heightened market stress—investors raise cash to meet margin calls or take profits where possible," he added, noting that the recent strength in the US dollar has also dampened gold demand. Market participants are also reassessing expectations for US monetary policy. Persistent high inflation has reduced the likelihood of significant interest rate cuts by the Federal Reserve, keeping Treasury yields elevated. Higher yields diminish the appeal of non-yielding assets like gold. The yield on the 10-year US Treasury note rose about 5 basis points to 4.384% on Tuesday. Some analysts view the sell-off as a natural correction following a prolonged rally driven by geopolitical uncertainty and structural demand. Last year, gold prices surged more than 64%. "The recent surge to all-time highs for gold was driven less by inflation and more by a broader decline in confidence: fiscal deficits, a fragmenting geopolitical landscape, and central banks quietly diversifying away from US dollar reserves," said Xavier Wong, Market Analyst at eToro. "After such a strong rally, some position unwinding is inevitable. Gold was one of the best-performing assets over the past year, and leveraged funds and institutional investors often reduce exposure when market volatility increases." Despite a shift towards bearish sentiment among investors, industry observers generally maintain a long-term optimistic outlook. They believe structural factors—including geopolitical risks, fiscal concerns, and continued gold purchases by central banks—will continue to support a long-term bull market for gold.