Gold prices rose for a third straight session on Wednesday to hit a one-week high, buoyed by a weaker dollar, while investors awaited US inflation data for clues on the pace of future US interest rate increases.

Spot gold was up 0.3 per cent at $1,332 an ounce, as of 0115 GMT, after touching its highest level since February 6 at $1,333.76. US gold futures rose 0.4 per cent at $1,335 per ounce.

The dollar was down against a basket of currencies at 89.722, having shed 0.6 per cent overnight. A retreat in the dollar, in which bullion is priced, has helped gold pull back nearly 2 per cent from last week’s one-month low of $1,306.81 an ounce.

Tense session

Asian shares were set for a tense session on Wednesday as investors await readings on US inflation that could fan fears of faster rate hikes and unleash another burst of global volatility.

US inflation data for January is due on Wednesday and the US Federal Reserve next meets on March 20-21.

British inflation unexpectedly held close to its highest level in nearly six years in January, highlighting the challenge facing the Bank of England and reinforcing expectations of a rise in interest rates in May.

Inflation fears

Economic growth in the US, Europe and Asia has stoked inflation fears in recent weeks, pushing up bond yields and undermining stock prices, and Wednesday’s US inflation data may help determine whether the correction in equities markets is over.

Inflation is sometimes regarded as gold-positive, because bullion is seen as a safe haven when price pressures are rising, but expectations that the US Federal Reserve will lift interest rates to fight inflation make the non-yielding metal less attractive.

Robust consumer spending drove Japan’s economy to eight straight quarters of growth in October-December, its longest continuous expansion since the 1980s bubble economy.

SPDR Gold Trust

SPDR Gold Trust , the world's largest gold-backed exchange-traded fund, said its holdings rose 0.36 per cent to 823.66 tonnes on Tuesday from 820.71 tonnes on Monday. Russia produced 306.9 tonnes of gold in 2017, up from 288.5 tonnes in 2016, the finance ministry had said on Tuesday.

South African miner Harmony Gold's half-year profit rose 49 per cent, boosted by improved performance at its South African operations, the firm had said on Tuesday.

Gold trader Regal RA DMCC has become the first company in West Asia to be awarded a licence by the Dubai Multi Commodities Centre (DMCC) to trade in cryptocurrencies.

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