Gold subdued after mixed signals from U.S. Fed

By Eileen Soreng

(Reuters) - Gold prices languished on Thursday as investors tried to grasp mixed signals from U.S. Federal Reserve officials on interest rate hikes and awaited more economic data to gauge inflationary pressures.

Spot gold was down 0.1% at $1,776.20 per ounce by 0709 GMT, while U.S. gold futures fell 0.3% to $1,777.30. Gold has risen 0.7% so far this week, after last week's 6% decline.

"Now the focus is on inflation ... gold needs a clear trigger to go higher than $1,800 but I am skeptical about that," said Jigar Trivedi, commodities analyst at Mumbai-based broker Anand Rathi Shares.

Two Fed officials said on Wednesday a period of high inflation in the United States may last longer than anticipated, with Atlanta Fed President Raphael Bostic expecting a rate hike in late 2022.

The remarks helped the dollar index steady near an 11-week high, after weakness earlier this week due to Fed Chairman Jerome Powell's reassurance that interest rates would not be hiked too quickly. [USD/]

Gold is often seen as a hedge against inflation, though a rate hike by the Fed will increase the opportunity cost of holding bullion and dull its appeal.

Spot gold is biased to the downside and may test a support at $1,769 per ounce, a break below which could open the way towards the range of $1,734-$1,744 range, according to Reuters technical analyst Wang Tao. [TECH/C]

Investor focus is now on U.S. data on producer price inflation due on Friday, while weekly figures later in the day will show how the labour picture -- key for Fed policy -- is shaping up.

Silver rose 0.1% to $25.88 per ounce, palladium edged 0.2% higher to $2,618.73 per ounce. Platinum dropped 0.7% to $1,076.72.

(Reporting by Eileen Soreng, Brijesh Patel and Arundhati Sarkar in Bengaluru, Editing by Sherry Jacob-Phillips, Aditya Soni)