Gold backs off 1-week high, falling dollar curbs losses

Gold prices fell on Wednesday, and pulled back from a week high on profit-taking, but today's loss is being curbed by falling dollar.

Gold prices fell 0.3% to $1,798.88 an ounce, after opening at $1,804.28, and hit a high of $1,804.64.

Gold closed higher by 0.6% yesterday, and hit a 1-week high at $1,808.66 after weak US inflation data.

The dollar index fell over 0.2% today against a basket of major rivals.

The greenback's drop comes on the back of weak inflation data in the US, which raised doubts about tightening the US monetary policy.

The data eased fears of rising inflationary pressures in the US, and led to a drop in the 10-year US Treasury bond yield, which fell more than 3% on Tuesday and hit a 3-week low at 1.263%.

Gold stocks at the SPDR ETF remained unchanged yesterday, with the total at the highest level since September 1st at 1,000.21 metric tonnes.