The retentive component of a clasp assembly is placed in the gingival third because this area provides the optimal undercut depth for effective retention without causing undue stress on the abutment tooth. The undercut in the gingival third allows the clasp tip to engage the tooth below the survey line, ensuring adequate flexibility and mechanical retention. Placing the retentive arm too occlusally would reduce flexibility and increase the risk of tooth damage, while positioning it too cervically compromises retention. Thus, the gingival third balances retention and periodontal health effectively.

Reference: R.S. Khan, Prosthodontics, Shahiduzzaman, 2nd Edition.