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Silver hit its highest in over three years

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Platinum hits near one-year peak

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Analyst says gold poised to capture $2,400/oz level

(Adds comments in paragraphs 10 and 12, updates prices and

graphic)

By Sherin Elizabeth Varghese

May 16 (Reuters) - Gold prices inched up on Thursday

following a sharp rise in the previous session as the dollar and

bond yields weakened after the U.S. consumer inflation data

boosted the likelihood of rate cuts by the Federal Reserve as

early as September.

Spot gold rose 0.2% at $2,391.78 per ounce, as of

0553 GMT, after hitting its highest in over three weeks on

Wednesday. U.S. gold futures rose 0.1% to $2,396.10.

The dollar eased against a basket of other major

currencies, making the greenback-priced bullion less expensive

for other currency holders. The benchmark 10-year

Treasury yield also touched its lowest in more than one month.

"With inflation coming off the boil, gold is effectively

making hay while the sun is shining and looks poised to capture

the $2,400 level," said Tim Waterer, chief market analyst at KCM

Trade.

"However, a potential bounce in the dollar or treasury

yields could be the biggest hurdle for gold price in the

remainder of the week."

Cooling U.S. consumer prices along with last week's

lacklustre jobs report and a softer-than-expected U.S. payrolls

report for April comes as good news to Fed policymakers waiting

to see renewed progress on inflation before reducing borrowing

costs.

Bullion is known as an inflation hedge, but higher rates

increase the opportunity cost of holding non-yielding gold.

Spot silver fell 0.4% to $29.56 per ounce, having hit

its highest since February 2021 earlier in the session.

"Silver is catching up with gold. Strong fundamentals amid

rising gold prices are likely to spur investor interest in

silver," analysts at ANZ wrote in a note, adding that they

expect the metal to trade above $31 by the end of 2024.

Palladium lost 0.2% to $1,009.68 and platinum

rose 0.5% to $1,068.67, hitting its highest since May 22 last

year.

"Platinum reached price parity with palladium, driven by its

growing use in auto catalysts for gasoline-powered cars," ANZ

added.