By Ed Ballard 

LONDON--Gold prices bounced between gains and losses Thursday, as a weaker dollar was counterbalanced by U.S. Federal Reserve Chairwoman Janet Yellen's warning Wednesday that waiting too long to raise interest rates could invite in the "nasty surprise" of inflation.

Gold was recently down 0.02% at $1,204.30 a troy ounce in midmorning trade in London.

Ms. Yellen said Wednesday the Fed expected to raise rates "a few times a year" through 2019, a faster pace than some market participants expect. Gold struggles to compete with yield-bearing investments when borrowing costs rise.

After climbing in the wake of Ms. Yellen's speech, the dollar ticked lower Thursday, with the WSJ Dollar Index recently down 0.2% at 91.75. A weaker dollar typically helps dollar-priced commodities like gold, as it makes them less expensive for holders of other currencies.

Analysts at ANZ Bank said buying by Chinese investors ahead of the Lunar New Year holiday at the end of this month was also providing some support for gold.

The precious metal plummeted after the election of Donald Trump as expectations of tax-cuts, higher inflation and rising interest rates sucked money into riskier assets and sent the dollar soaring, but has recovered around 4% this year.

The attention of investors seeking to chart the likely path of U.S. interest rates will turn back to Ms. Yellen, who is due to address the economic outlook in a speech at Stanford University at 01:00 GMT Friday.

Before that, Thursday's session brings housing starts data from the Commerce Department and a business outlook survey from the Federal Reserve Bank of Philadelphia.

Other precious metals were mixed. Silver shed 0.5% to $17.00 an ounce, platinum was up 0.1% at $964.15 an ounce, and palladium was gained 0.3% to $751.65 an ounce.

Write to Ed Ballard at ed.ballard@wsj.com

(END) Dow Jones Newswires

January 19, 2017 05:47 ET (10:47 GMT)

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