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Gold prices edged lower on Wednesday, as worries over aggressive monetary policies by major central banks pressured demand for bullion, outweighing relief stemming from the dollar's recent retreat.

Spot gold was down 0.2% at $1,707.95 per ounce, as of 0751 GMT. U.S. gold futures fell 0.3% to $1,705.50.

The dollar was steady after a three-session losing streak, which had helped make greenback-priced bullion less expensive for buyers holding other currencies, although it remained at relatively high levels. [USD/]

Gold seems to be the odd person out, not participating in any broader relief rally on a lower dollar, said Stephen Innes, managing partner at SPI Asset Management, adding that central banks' front-loaded rate hikes are clearly tarnishing bullion's appeal.

British inflation in June accelerated to its highest in 40 years, bolstering chances of a rare half-percentage-point Bank of England interest rate hike next month.

European Central Bank (ECB) policymakers are considering raising rates by a larger-than-expected 50 basis points at their meeting on Thursday to tame record-high inflation.

Since the dollar is reacting to a (possibly) more aggressive rate hike by the ECB, gold isn't getting the bounce one would typically expect via a softer greenback, Innes said.

Although gold is seen as an inflation hedge, higher interest rates and bond yields raise the opportunity cost of holding bullion, which yields no interest.

Benchmark U.S. 10-year Treasury yields eased after two sessions of gains. [US/]

Spot gold may retest a resistance at $1,721 per ounce, a break above which could lead to a gain into $1,728-$1,739 range, according to Reuters' technical analyst Wang Tao. [TECH/C]

Meanwhile, Asian shares extended a global rally as strong U.S. corporate earnings and the expected resumption of Russian gas supplies to Europe helped lift sentiment and ease fears of a recession.[MKTS/GLOB]

Spot silver rose 0.3% to $18.79 per ounce, platinum firmed 0.2% to $876.33, and palladium dipped 0.2% to $1,871.85.