Gold prices held steady near a four-month high on Wednesday, helped by a weaker dollar. Image Credit: Agency

Dubai: Gold prices held steady near a four-month high on Wednesday, helped by a weaker dollar, ahead of minutes from the U.S. Federal Reserve's last policy meeting that are expected to shed more light on policymakers' view on inflation.

Spot gold was flat at $1,866.54 per ounce by 0303 GMT, after hitting its highest since Jan. 29 at $1,874.80 in the previous session.

U.S. gold futures were steady at $1,868.

"Gold surged aggressively since the start of the week around the narrative that we could see inflation pick-up in an environment where the Fed is resistant to tightening," DailyFX currency strategist Ilya Spivak said.

"Against that backdrop, we've seen stronger commodity prices in general and a weaker dollar. Certainly the price of gold has been a notable reflection of that."

The dollar index held close to a near three-month low against its rivals, making gold less expensive for other currency holders.

Gold prices have risen about $190 or more than 11% after falling to a nine-month trough in early March, with gains driven by a pullback in the U.S. currency and inflation expectations as bullion is seen as a hedge against inflation.

Concerns over rising inflation intensified after US consumer prices in April rose 4.2% on-year, the fastest increase in more than a decade.

Market participants are awaiting the release of minutes from the U.S. Fed's April 27-28 policy meeting at 1800 GMT.

The U.S. central bank has pledged to keep interest rates low until the economy reaches full employment and Fed officials have repeatedly maintained they expect any rise in inflation to be short-lived.