(Jan 11): Gold scaled an eight-month peak on Wednesday (Jan 11) underpinned by a subdued US dollar, but it still moved in a relatively tight range as traders positioned for inflation data that could influence the US Federal Reserve's interest rate hikes.

Spot gold was up 0.3% to US$1,882.36 per ounce as of 0615 GMT, its highest level since early May 2022. US gold futures rose 0.6% to US$1,887.60.

The dollar index slipped 0.1%, making greenback-priced bullion cheaper for overseas buyers. Benchmark US 10-year Treasury yields also edged lower.

Overall, it looks like gold is currently consolidating into a range as the focus turns to the US consumer price index (CPI) data on Thursday, said Ilya Spivak, head of global macro at Tastytlive.

"If the data shows that inflation is softer, then gold might go north of the US$1,900 level. However, it would be interesting to see if gold can get much traction beyond that."

Gold is considered an inflation hedge but is highly sensitive to rising interest rates, which increase the opportunity cost of holding the non-yielding bullion.

Fed Governor Michelle Bowman said on Tuesday that the US central bank will have to raise rates further to combat high inflation and that will likely lead to softer job market conditions.

Spot silver rose 1.2% to US$23.89 and platinum gained 0.7% to US$1,088.

Palladium slipped 0.4% to US$1,773.88. Automakers embed palladium in exhaust pipes to neutralise harmful emissions, but the metal is not required for that function in electric vehicles (EVs).

The expansion of EVs is expected to continue in 2023, leading to a small overall decline in palladium's demand for cars, despite an expected increase in overall new cars across markets, analysts at Heraeus Precious Metals said in a note.