Gold Prices are Trending Downwards as Fed's backs gradual rate hikes

Federal Reserve Chair Janet Yellen announces that she welcomes the hiking of U.S. interest rates gradually which has pressured gold prices. Spot gold was down by 0.1% to $1,202 per ounce by 0335 GMT, after dropping to as much as $1,197.31. Last Tuesday it has hit eight-week high of $1,218.64. U.S. gold futures had fallen as much as over 1% to $1,197.10.

The U.S. dollar index which measures the greenback against a basket of currencies, were up by 0.3% to 101.200.

Since the U.S. economy is close to full employment and inflation headed toward the Federal Reserve's 2% goal, it "makes sense" for the U.S. central bank to gradually lift interest rates, Fed Chair Janet Yellen said on Wednesday.

Dallas Fed President Robert Kaplan on Wednesday joined the chorus of central bank officials making a case for a gradual hike in U.S. interest rates.

U.S. consumer prices increased in December as households paid more for gasoline and rental accommodation, leading to the largest year-on-year increase in 2-1/2 years and signaling that inflation pressures could be building.

Silver fell by 0.3% to $16.97 an ounce while Platinum fell 0.5% to $956.50, and palladium was down 0.1% to $747.70.