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Gold touched a one-month high on Thursday, as a dip in the dollar and US bond yields allowed investors to turn to bullion as an inflation hedge.

Spot gold was up 0.1% to $1,795.05 per ounce per ounce by 9:43 a.m. EDT, having earlier hit its highest level since Sept. 15 at $1,799.95. US gold futures gained 0.2% to $1,798.80.

Gold also seemed to largely overlook data showing the number of Americans filing new claims for jobless benefits fell last week.

"Traders and investors are finally realizing that rising inflation is, historically, bullish for metals, no matter what the Federal Reserve does," said Jim Wyckoff, senior analyst at Kitco Metals.

Further volatility in equities this month may also spark some safe-haven demand for gold, Wyckoff added.

Gold prices gain as inflation concerns grow

Sentiment in wider markets has remained fragile of late, as an energy crunch in key economies stoked fears that the resultant jump in prices may slow a post-pandemic economic revival.

Chinese producer prices posted a record annual increase last month and US consumer prices also increased solidly, fanning fears that central banks might unwind their economic support sooner than anticipated.

While gold is considered an inflation hedge, reduced stimulus and interest rate hikes push government bond yields up, raising the opportunity cost of holding non-interest-bearing bullion.

Minutes from the Fed's Sept. 21-22 policy meeting showed it could start reducing its stimulus by mid-November.

But "now that we've got a little bit of visibility on what the Fed intends to do in terms of tapering, and it's a relatively small amount; that's been positive for gold," independent analyst Ross Norman said.

Gold, however, still has to breach key technical resistance around $1,800 and $1,835, before another substantial move higher, Norman added.

Spot silver rose 0.8% to $23.24 per ounce, platinum gained 1.5% to $1,035.47 and palladium climbed 1.9% to $2,146.73.

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