Gold prices held near two-month highs on Thursday as a retreat in U.S. Treasury yields and the dollar sparked investor interest, with concerns surrounding inflation and geopolitics lending support.
Spot gold eased 0.2% to $1,836.80 per ounce by 1102 GMT, after scaling its highest since Nov. 22 at $1,843.94. U.S. gold futures fell 0.3% to $1,837.30.
"This morning we are looking at a pause for breath after yesterday's gains. Those gains result from the market finally seeking what we have been expecting for a while, which is using gold as a hedge against inflation," Ricardo Evangelista, senior analyst at ActivTrades said.
Reflecting investor sentiment, holdings of the world's largest gold-backed exchange-traded fund, SPDR Gold Trust GLD , jumped 0.5% on Wednesday.
The dollarwas lacklustre as U.S. benchmark 10-year yields retreated from two-year highs.
Growing geopolitical instability, notably over tensions between Russia and Ukraine, was also supporting gold, Evangelista said.
Oil prices were trading near their highest levels since 2014.
The U.S. Federal Reserve will meet next week and is expected to tighten monetary policy faster than thought earlier to tame inflation, a Reuters poll showed.
Elsewhere, platinum rose 2.1% to $1,043.89 and palladium gained 2.1% to $2,044.30, both their highest in two months.
The previous session saw auto-catalysts platinum and palladium rally, which could be related to supply concerns due to the Russia-Ukraine tensions, Commerzbank analysts said in a note.
Potential Western sanctions on Russia, one of the biggest producers of palladium, and an export ban on the metal, which is so vital for the automotive industry, could lead to a severely undersupplied market, Commerzbank said.
Silver rose 0.3% to $24.19 an ounce, also at a two-month high.
(Reporting by Seher Dareen and Swati Verma in Bengaluru; Editing by Emelia Sithole-Matarise) ((Seher.Dareen@thomsonreuters.com; If within U.S. +1 646 223 8780;))