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Gold prices rose to a two-week high on Wednesday as the dollar and U.S. bond yields slipped on expectations that the Federal Reserve would temper its aggressive rate-hike stance from December.

Spot gold rose 1% to $1,669.22 per ounce by 10:22 a.m. ET (1422 GMT), after touching its highest since Oct. 13.

U.S. gold futures were also up 1% at $1,673.80.

"Over the course of the last couple sessions, we've seen yields drop, the dollar come down and as a result, we've seen a renewed bid in the gold market, said David Meger, director of metals trading at High Ridge Futures.

The dollar extended losses to a more than one-month low against its rivals, making gold less expensive for other currency holders. Benchmark U.S. 10-year Treasury yields dropped to a one-week low.

Data on Tuesday showed that U.S. consumer confidence ebbed in October, home prices fell sharply in August and there were signs that the Fed's aggressive stance was starting to cool the labour market.

"We might see a slowing of the economy, but inflation may not come down as much as the Fed would like and yet they will be no longer able or willing to raise rates further and that is a very positive environment for gold," Meger said.

However, the Fed is still widely expected to raise interest rate by 75 basis points in November. Gold is highly sensitive to rising U.S. interest rates, as they increase the opportunity cost of holding non-yielding bullion

Focus now shifts to U.S. GDP data on Thursday, followed by U.S. core inflation numbers on Friday that could offer more clarity on the Fed rate-hike trajectory.

Also on the radar, the European Central Bank meeting is scheduled on Thursday.

Spot silver rose 1.3% to $19.59 per ounce, platinum jumped 3.2% to $944, and palladium was up 1% at $1,943.13.