*
Gold back up from over 1-month low hit on Wednesday
*
U.S. dollar down 0.2% after near 6-week peak on Wednesday
*
Benchmark 10-year Treasury yields hit highest since Jan 3
(Updates prices)
By Kavya Guduru
Feb 16 (Reuters) - Gold prices edged higher on Thursday
as the dollar pulled back, although prospects of more interest
rate hikes by the U.S. Federal Reserve kept investors on edge.
Spot gold was up 0.1% at $1,837.64 per ounce, as of
0702 GMT, after hitting its lowest level since early January on
Wednesday. U.S. gold futures also edged 0.1% higher to
$1,846.30.
Higher interest rates discourage investment in non-yielding
gold, although it is considered a hedge against soaring prices.
"Though the recent positive U.S. economic releases and a
firm U.S. dollar continue to put pressure on the safe-haven
status of gold, there are chances of a mild technical
bounce-back as prices dipped to multi-week lows," said Hareesh
V, head of commodity research at Geojit Financial Services.
Data on Wednesday showed U.S. retail sales rebounded in
January after two straight monthly declines, pointing to the
economy's continued resilience despite higher borrowing costs.
The strong retail sales numbers, along with Tuesday's data
showing stubbornly high U.S. inflation for last month, have
reinforced concerns that the Fed would keep interest rates
higher for longer.
The data releases may give the Fed confidence to hike rates
further, putting pressure on bullion in the short term, Geojit's
Hareesh said.
Several Fed policymakers this week have signalled that more
hikes are needed to bring inflation down to the central bank's
2% target.
Money markets are expecting the Fed's target rate to peak
above 5.2% in July, from a current range of 4.50% to 4.75%. Gold may end its bounce around a resistance at $1,853 per
ounce, and resume its drop thereafter, according to Reuters
technical analyst Wang Tao.
The dollar index was down 0.2% after hitting a near
six-week peak on Wednesday, making greenback-priced gold less
expensive for overseas buyers. Benchmark 10-year Treasury yields hit their highest since Jan. 3. Spot silver firmed 0.1% to $21.64 per ounce, platinum was 0.2% higher at $916.40 and palladium shed 1%
to $1,449.22.
(Reporting by Kavya Guduru in Bengaluru; Editing by Subhranshu
Sahu and Sherry Jacob-Phillips)
