KEY POINTS:
Dollar eases off recent peak
U.S. 10-year bond yields ease off highs
Gold rose more than 1% on Wednesday as a slight retreat in the dollar rekindled some of its safe-haven appeal, although prospects of sharp rate hikes kept the non-yielding metal near a 2-1/2-year trough.
Spot gold GOLD climbed 1.3% to $1,650.49 per ounce by 10:58 a.m. EDT (1458 GMT), rising as much as 1.5% into the U.S. session to recoup some losses from a slide to its lowest since April 2020 earlier in the day.
U.S. gold futures GOLD advanced 1.4% to $1,658.90.
A pullback in the dollar and yields have "seen gold move off those lows," said David Meger, director of metals trading at High Ridge Futures.
"The factors in regards to Russia and the discussion of annexation... that probably gave a bid to the (gold) market from a safe-haven perspective," Meger added.
The dollar DXY retreated after scaling a new two-decade high, making bullion less expensive for overseas buyers, while Treasury yields eased.
Moscow was poised on Wednesday to annex a swath of Ukraine, releasing what it called vote tallies showing support in four partially occupied provinces to join Russia, after what Kyiv and the West denounced as illegal sham referendums held at gunpoint.
Moreover, "gold is seeing some relief as the UK's plan to buy long-end Gilts sees yields weaken," TD Securities said in a note.
Gold, however, has failed to benefit from the recent rout in equities and faces headwinds from looming rate hikes that would raise the opportunity cost of holding non-yielding bullion.
Meanwhile, silver XAGUSD gained 1.3% to $18.66 per ounce after hitting a three-week low of $17.94 earlier in the session.
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