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

Spot gold rose 0.2 per cent to US$1,858.56 per ounce by 2.55am GMT, while US gold futures gained 0.9 per cent to US$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 US dollar balances out." Benchmark 10-year Treasury yields fell from 10-month highs, dragging the dollar lower and making gold cheaper for other unit holders.

Further boosting gold was US 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.

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Several US Federal Reserve (Fed) 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," Mr Rodda said.

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

REUTERS