Gold prices declined on Thursday, topping a 2-month peak, as worries ahead of a speech by Federal Reserve Chair Jerome Powell partially countered safe haven demand sparked by the Israel-Hamas conflict.

Spot gold slumped by 0.1% to $1,946.51 per ounce, while gold futures dipped 0.5% at $1,958.35 per ounce.

This week saw a huge increase in the price of yellow metal as the Israel-Hamas conflict heated up, raising worries that it would spread to other parts of the Middle East. This in turn increased demand for traditional safe havens.

Still, as markets awaited more developments in the Israel-Hamas conflict, gold prices stayed within striking distance of a more than two-month high achieved earlier this week. A summit between the presidents of the United States, Egypt, and Palestine was called off, which increased demand for the yellow metal as a safe haven.

This week's spike in Treasury yields showed that markets are already pricing in higher interest rates, particularly in light of recent data that showed an unexpected increase in U.S. inflation. Other Fed officials' remarks from the previous night reaffirmed the bank's hawkish attitude.