May 5 Reuters Gold prices edged lower on Wednesday as a stronger dollar and prospects of higher U.S. interest rates dampened the allure of the safehaven metal, while palladium held firm after scaling a record peak in the previous session.

Spot gold was down 0.1 at 1,776.71 per ounce by 0711 GMT. U.S. gold futures were steady at 1,775.90.

A stronger dollar and Treasury Secretary Yellens ratehike comments overnight continue to weigh on sentiment in Asia, with multiple failures ahead of the 1,800 an ounce region, OANDA senior market analyst Jeffrey Halley said.

The dollar index turned positive and was hovering close to a near twoweek peak against its rivals.

Yellen on Tuesday said she sees no inflation problem brewing, downplaying earlier comments that rate hikes may be needed to stop the economy overheating as U.S. President Joe Bidens spending plans boost growth.

Higher interest rates dull golds appeal as it increases the opportunity cost of holding nonyielding bullion.

Investor focus is expected to shift to April payrolls data due on Friday for further cues on the health of the U.S. economy.

So far, Federal Reserve Chair Jerome Powell has argued the labour market is still far short of where it needs to be to start discussing tapering asset buying.

Elsewhere, palladium rose 0.5 to 2,999.49 per ounce after hitting an alltime high of 3,017.18 in the previous session, driven by concerns of a shortage of the metal.

Rallies in palladium and platinum are being…