Gold rises as U.S. dollar retreat

Gold prices edged up on Wednesday as the dollar pulled back and the U.S. Treasury yields traded lower, while the outlook of a massive U.S. fiscal stimulus further boosted the metal's appeal as an inflation hedge.

Spot gold rose 0.2% to $1,858.56 per ounce by 0255 GMT, while U.S. gold futures gained 0.9% to $1,860.10.

"The big picture is it's still a very constructive year for gold. With real yields remaining rather negative and as the dollar continues its path lower as the year unfolds, making gold an attractive proposition," said IG Market analyst Kyle Rodda.

"But I wouldn't be surprised if we see dips or a short-term downtrend in gold as the U.S. dollar balances out."

Further boosting gold was U.S. President-elect Joe Biden's plan to inject the virus-hit economy with "trillions" of dollars in relief measures.

Global coronavirus infections rose to more than 91 million, with several Asian and European countries enforcing stricter restrictions to curb the spread of the virus, while vaccination rates remained underwhelming.

Several U.S. Federal Reserve officials see the economy recovering strongly if the vaccinations gather pace, but that also invokes questions about the outlook of central bank's monetary policy.

"Stimulus from Biden should increase inflation expectations and should be good for gold in the short term, but it does rely on the Fed still remaining accommodative, keeping long term rates low," Rodda said.

Silver dipped 0.2% to $25.51 an ounce. Platinum rose 0.3% to $1,079.21, while palladium eased 0.2% to $2,388.78.