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Gold prices crawled up on Wednesday as US Treasury yields slightly eased, but held close to a seven-week trough on growing expectations of a quicker-than-expected US rate hike that pushed the dollar to a multi-month high.

Spot gold rose 0.4% to $1,740.19 per ounce by 0330 GMT. On Tuesday prices fell to their lowest level since Aug. 11 to $1,726.19.

US gold futures edged 0.2% higher to $1,740.50 per ounce.

"What you're seeing this morning is just a technical bounce ... There is a very little bullish case for gold right now," said OCBC Bank economist Howie Lee.

"We see gold at around $1,500 by the end of 2022, especially with tapering having completed its course by then and the Fed looking to start raising its interest rates."

The dollar index hovered near a more than 10-month high, touched on Tuesday.

Though the benchmark US 10-year Treasury yields eased off a bit, it held above 1.5%, a level last seen in June.

Gold slides over 1pc

Higher yields translate into higher opportunity costs for holding non-interest bearing bullion.

St. Louis Federal Reserve President James Bullard on Tuesday cautioned high inflation may require more aggressive steps by the central bank, including two interest rate hikes in 2022.

In his testimony before the US Senate Banking Committee, Fed Chair Jerome Powell said the US economy is still far from achieving maximum employment, a key component of the central bank's requirements for raising interest rates.

Indicative of sentiment, holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, slipped to 990.03 tonnes on Tuesday from 990.32 tonnes the day before.

Silver rose 0.4% to $22.52 per ounce.

Platinum edged up 0.3% to $969.75, while palladium gained 1.1% to $1,896.23.

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