Gold prices firmed above the key $1,900 level on Wednesday, boosted by weaker US Treasury yields and expectations that the US Federal Reserve will maintain a dovish monetary policy stance.

Spot gold was 0.2% higher at $1,902.03 per ounce by 10:07 a.m. EDT (1407 GMT), after hitting its highest since Jan. 8 at $1,912.50. US gold futures gained 0.2% to $1,901.80.

"Some of the economic data has been slowing down, and that's likely to keep Treasury yields grounded, which has been the primary driver in sending gold prices higher," said Edward Moya, senior market analyst at OANDA.

"The market is probably going to have to deal with a slight rebound in the dollar here...but we are still going to see gold prices continue to rise and $1,950 level seems like a very short term goal."

Benchmark US 10-year Treasury yields held near a more-than two week low touched on Tuesday, reducing the opportunity cost of holding non-interest paying gold.

However, the dollar index recovered from lows, making gold more expensive for holders of other currencies.

Fed vice chair Richard Clarida on Tuesday said the US central bank can curb an outbreak of inflation should it occur without throwing recovery off track.

"With algorithmic short covering now running out of steam, gold prices are lagging the move lower in real rates, highlighting the growing risk of a pullback," TD Securities said in a note.

However, "with investors still sounding the alarm over inflation, institutional interest in the precious metals complex is likely to continue rising following months of outflows, providing an offsetting force against taper fears for the time being."

Investors are now looking to US gross domestic product, jobless claims and consumer spending data this week.

Elsewhere, palladium fell 0.5% to $2,755.89 per ounce, silver eased 0.6% to $27.82 and platinum rose 0.1% to $1,192.73.