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Gold prices firm near multi-month highs on weaker dollar and yields

Spot gold was up 0.2% to $1,885.47 per ounce by 0724 GMT, after falling as much as 0.5% earlier in the session

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The dollar index slipped 0.3% to its lowest since Jan. 7 against its rivals, making gold less expensive for holders of other currencies

Brijesh Patel | Reuters

Gold reversed course on Tuesday, climbing towards last week's 4-1/2-month peak, supported by a weaker dollar and bond yields after Federal Reserve officials affirmed their support to keep monetary policy accommodative for some time.

Spot gold was up 0.2% to $1,885.47 per ounce by 0724 GMT, after falling as much as 0.5% earlier in the session.

US gold futures edged 0.1% higher to $1,886.50.

"Weak dollar, rebound in investment demand and no major threat of tapering in near term from the US Federal Reserve are major reasons for gold achieving $1,885 recently," said Jigar Trivedi, commodities analyst at Mumbai-based broker Anand Rathi Shares.

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