Gold rises over growing expectations of higher inflation, policy decision caution cap gains

Gold prices flirted near their highest level in more than two weeks as the possibility of higher inflation loomed larger. The caution ahead of the up-and-coming US Federal Reserve policy decision, however, curbed further gains of the yellow metal.

Gold futures added 0.22% at $1,734.75. For the fourth straight day, the dollar gained as the boost from rising benchmark U.S. Treasury yields came through.

However, analysts say that gold will be further tested as the Federal Reserve announces its policy decision later in the day and see if its luster remains despite rising U.S. yields.

Meanwhile, the Bank of England is also due to relay its policy decision on Thursday and Bank of the Japan on Friday.

In other precious metals, both silver and platinum dropped 0.4%, and palladium lost 0.2%, following a one-year high of $2,520.31 record on Tuesday.