Gold prices fell on Wednesday as the U.S. dollar and Treasury yields bounced back, with investors looking ahead to U.S. inflation data for more direction on interest rates.

Spot gold was down 0.3% at $1,847 per ounce as of 0733 GMT, while U.S. gold futures fell 0.1% to $1,850.20.

"Gold has been treading water pretty much the last few weeks. I think the reason is that people are probably getting a little optimistic about some of the inflation readings," said Edward Meir, an analyst with ED&F Man Capital Markets.

"We're not seeing gold really making its move and it's because there is a perception that we're approaching peak inflation ... Gold needs to see progressively higher inflation readings ... But if inflation sort of levels off, it's not good for gold."

Bullion is used as a hedge against inflation, but higher interest rates increase the opportunity cost of holding the non-yielding asset.

Gains in gold have been largely capped as central banks tightened monetary policy to cool surging prices.

The U.S. core consumer price index (CPI) due on Friday is expected to have gained 5.9% on the year, after an annual rise of 6.2% in April, according to a Reuters poll. "If the core y/y rate ticks down as modestly as expected (or even less so), gold may fall as rate hike bets for next year rebuild," said Ilya Spivak, a currency strategist at DailyFX.

Elsewhere, platinum was down 0.4% to $1,006.91 an ounce and palladium fell 0.1% to $1,982.41.

Silver slipped 0.6% to $22.08. "ETF outflows have gathered pace across platinum and silver products.

Slower auto sales, concerns around slower growth and the risk of recession are starting to weigh on demand prospects for much of the complex," Standard Chartered wrote in a note.

The World Bank slashed 2022 global growth forecast by nearly a third to 2.9% on Tuesday.

(Reporting by Swati Verma in Bengaluru; editing by Uttaresh.V and Jason Neely)