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Gold prices rose more than 1% on Wednesday, supported by a weak dollar, as investors braced for a possible sharp interest rate hike by the Federal Reserve.
Spot gold rose 1.2 percent to $1,829.99 an ounce by 1225 GMT, while US gold futures rose 1.1 percent to $1,832.70.
The dollar index fell 0.2 percent on the day, after approaching a 20-year high in the previous session, while 10-year US Treasury yields also fell from multi-year highs.
The higher-than-expected US inflation data last week prompted investors to raise their expectations for the Federal Reserve’s rate hike to 75 basis points instead of 50 basis points to calm mounting price pressures.
Gold is often viewed as a safe asset in times of economic uncertainty, but rising interest rates and bond yields increase the opportunity cost of holding non-yielding gold.
As for other precious metals, silver rose in spot transactions by 1.9 percent to $21.48 an ounce, while platinum rose 2.1 percent to $939.88, and palladium rose 1.2 percent to $1,836.85.
