Gold prices moved in a narrow range on Wednesday, anchored by a retreat in the dollar as investors squared positions in the run-up to US consumer prices data later in the week.

Spot gold was little changed at $1,784.72 per ounce by 1351 GMT, having retreated slightly from the session's peak at $1792.90 before moving back into a tight range.

US gold futures rose 0.5% to $1,793.20 per ounce.

With markets more optimistic as worries over the Omicron coronavirus variant ease, gold has joined the bandwagon in part because of its inverted correlation with the dollar, Ricardo Evangelista, senior analyst at ActivTrades, said.

But gold's upside may be limited and it was not likely to move above the $1,810 level, especially with the narrative shifting back to central banks' tightening policy, which was likely to drive further US dollar gains, Evangelista added.

Although a move higher in benchmark US Treasury yields dimmed gold's appeal, this was offset by a retreat in the dollar index as a softer US dollar decreases bullion's cost for overseas buyers.

Gold eases as risk appetite improves and dollar firms

"Gold at the moment is not an arrow, it is a feather, and the feather is literally book squaring; it's people selling a bit here and buying a bit there and in thin markets you can get big moves," independent analyst Ross Norman said.

The market remained focused on Friday's US Consumer Price Index (CPI) report that may influence the timeline of the Fed's tapering of economic support before its next policy meeting on Dec. 14-15. Reduced stimulus and interest rate hikes tend to push government bond yields higher, raising the opportunity cost of holding gold, which bears no interest.

Spot silver shed 0.3% to $22.41 per ounce, platinum dropped 0.3%% to $948.48 per ounce and palladium dipped 0.9% to $1,835.90.