Gold for April delivery rose $8 to end at $937.80 an ounce on the New York Mercantile Exchange. During intra-day trading, the price fell as much as 1.5 percent. The metal jumped 2.6 percent yesterday.
Gold is now extremely well-placed to set a fresh record high as investors continue to seek the metal's anti-inflationary and safe-haven attributes, said James Moore, an analyst at TheBullionDesk.com, in a note.
Gold futures rose, in spite of a strengthening dollar. The dollar gained after both core and headline inflation figures were higher than expected in January, raising concerns the U.S. Federal Reserve might have to stop raising interest rates.
The dollar index, which tracks the performance of the greenback against a basket of currencies, edged up 0.07 percent at 76.17.
The fact that commodities were all up across the board yesterday despite an uninspiring macro backdrop also suggests that fund and investment money is finding its way into the commodity space on perceptions that these investments will do better over the course of the year, said Edward Meir, an analyst at MF Global, in a research note.
April platinum dropped $14.30 to end at $2,138.80 an ounce after 14 consecutive days of breaking records. The precious metal highest record was set on Tuesday when it rallied $89.40 to $2,174 an ounce on Tuesday.
Heavy investor profit-taking has been witnessed overnight, causing the metal to tumble, Moore said. Further disinvestment could cause some further sizable price drops in the coming sessions.
Also on Nymex, March palladium ended down $5.10 at $494.20 an ounce, while March silver gained 25 cents to end at $17.76 an ounce.
March copper fell 1 cent to $3.71 a pound.