The U.S. dollar regained its footing on Thursday, rebounding after a brief pullback from three-month highs, as an escalating conflict in the Middle East kept investors jittery and drove demand for safe-haven assets.

Earlier hopes of a de-escalation gave way to a fresh bout of uncertainty, with Iran warning that Washington would "bitterly regret" the sinking of an Iranian warship off Sri Lanka. 

Bitcoin retreated on Friday, falling below the key $70,000 level as escalating conflict in the Middle East drove oil prices higher and clouded the outlook for global inflation and interest rates.

The world’s largest cryptocurrency was last down 5.2% at $68,779.0 by 09:40 ET (14:40 GMT), after briefly jumping above $74,000 earlier this week, leaving it still on track for a weekly gain of more than 4%. 

Gold prices gained on Wednesday, following a hefty fall in the previous session, as a weaker dollar prompted investors to dive back into the yellow metal’s safe-haven status. The escalating conflict in the Middle East remained at the top of investors’ minds.

At 14:14 ET (19:14 GMT), Spot gold rose 0.8% to $5,128.80 an ounce, and U.S. Gold Futures gained 0.4% to $5,143.41/oz.

March 4 (Reuters) - Average U.S. retail diesel prices surpassed $4 a gallon for the first time in nearly two years on Wednesday and are set to rise further later in the week as the U.S.-Israel conflict with Iran dragged on, threatening to hit consumers with sticker shocks on everything from food to furniture.

Prices for diesel, used mainly in manufacturing and freight, have been on a tear since Iran began retaliating against U.S. and Israeli strikes on the country by bombing energy infrastructure across the Middle East and disrupting shipping in the Strait of Hormuz, a key global trade route.