Gold prices were steady on Wednesday, hovering close to the$1,800 psychological level, as a weaker dollar and lower U.S. bond yields countered risk appetite spurred by less-hawkish comments from Federal Reserve officials.
Spot gold was at $1,798.21 per ounce, as of 0449 GMT. In the previous session, bullion had touched $1,805.43 as investment demand strengthened.
U.S. gold futures were down 0.2% to $1,798.60.
"The shift towards a more risk-on approach by investors is probably gold-negative, however, the resultant weakness in the dollar helps gold, and the decrease in U.S. TIPS yields has provided support for gold," said Nicholas Frappell, a global general manager at ABC Bullion.
"(St. Louis Fed President James) Bullard's comments on the topic of a 50 bp rise is part of a tendency among Fed officials to soften the markets' take on the pace and extent of tightening in 2022."
A noted hawk, Bullard said on Tuesday he would argue for interest rate rises in March, May and June, but did not favour a half-point move.
Although gold is considered a hedge against inflation, rate hikes would raise the opportunity cost of holding non-yielding bullion.
All three Wall Street benchmarks advanced on Tuesday and the energy index closed at a multi-year high, although seesaw trading reflected investor uncertainty about how to play the current market.
The dollar index eased off 19-month highs against its rivals, making gold cheaper for other currency holders.
Benchmark U.S. 10-year Treasury yields hovered near their lowest levels in a week, with investors pricing in a possibility that the Fed could raise rates as many as five times this year.
Spot silver was flat at $22.64 an ounce, platinum fell 0.2% to $1,025.00 while palladium shed 0.1% to $2,359.73.
(Reporting by Asha Sistla in Bengaluru; Editing by Sherry Jacob-Phillips)
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
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