NEW YORK: Gold prices rose on Wednesday, hovering below a near five-month peak hit the previous session, as US Treasury yields pulled back, while investors awaited key economic data this week that will shed light on the outlook for inflation.

Spot gold was up 0.4% at $1,906.80 per ounce at 1:43 p.m. EDT (1743 GMT), after hitting its highest since Jan. 8 at $1,916.40 on Tuesday. US gold futures settled up 0.3% at $1,909.90.

“At this point it’s the anticipation of some of the economic news that’s coming out this week ... which is going to further the concerns regarding inflation and will have a positive impact on the momentum in the gold market,” said Jeffrey Sica, founder of Circle Squared Alternative Investments.

“The Treasuries have been relatively calm considering the inflation news,” Sica said, adding that momentum in the stock market was preventing gold from breaking higher.

Benchmark US 10-year Treasury yields eased below 1.60%, reducing the opportunity cost of holding bullion, which pays no interest, while stock markets hovered near record highs.

Investors are now awaiting US payrolls data due on Friday to gauge cues on future monetary policy.

Bottlenecks in the supply chain and rising commodity prices could limit US manufacturing growth potential, and the Federal Reserve is paying attention to labour market data, Commerzbank analyst Daniel Briesemann said. The dollar index eased from session highs, making gold more affordable for other currency holders.

“A weaker dollar and high inflation (both expected and real) should lend support to gold. We continue to see gold at $2,000 sometime in the second half of the year,” ED&F Man Capital Markets analyst Edward Meir said.

Among other precious metals, palladium was steady at $2,860.21 per ounce, silver gained 0.7% to $28.10, and platinum slipped 0.2% to $1,189.10.