* Spot gold may bounce into $1,768-$1,776 range -technicals
* Signs of prolonged stagflation could push gold towards $1,800 -analyst
Oct 12 (Reuters) - Gold prices rose on Tuesday as a risk-off sentiment and concerns over inflation bolstered its appeal, however expectations that the U.S. Federal Reserve will start paring economic stimulus capped gains.
Spot gold rose 0.3% to $1,759.56 per ounce by 0720 GMT, while U.S. gold futures were up 0.3% at $1,761.40.
“This energy crisis continues to dominate market sentiment because there are concerns that inflation is now probably not as transitory as earlier expected and that’s underpinning gold prices,” said Harshal Barot, a senior research consultant for South Asia at Metals Focus.
Economic data will be closely watched for the health of global economy and signs of prolonged stagflation could push gold towards $1,800, he added.
Inflation fears triggered by global energy crunch, and debt troubles at China Evergrande weighed on Asian shares.
However, gold investors are reluctant to chase the move higher ahead of the minutes of the Fed’s September meeting, said Stephen Innes, managing partner at SPI Asset Management.
The dollar index held close to a one-year high touched last month.
The benchmark U.S. 10-year Treasury yield hit its highest since early June on expectations that elevated inflation could add pressure on the Fed to raise interest rates.
Gold is often viewed as an inflation hedge, but reduced central bank stimulus and interest rate hikes tend to push government bond yields up, translating into a higher opportunity cost for holding non-interest yielding bullion.
Market participants now await the minutes of the Fed’s Sept. 21-22 policy meeting and the consumer price index, both due on Wednesday.
Spot gold may bounce into a $1,768-$1,776 range, as it managed to stabilise around a support at $1,748, according to Reuters technical analyst Wang Tao.
Spot silver was flat at $22.56 per ounce, while platinum rose 0.4% to $1,012.48.
Palladium fell 0.7% to $2,097.24, having hit its highest since Sept. 10 at $2,182.67 on Monday.
(Reporting by Eileen Soreng in Bengaluru; editing by Subhranshu Sahu and Jason Neely)
Source: Reuters