* Dollar eases off more than one-year high
* Banks prepare to scrap LME gold and silver contracts
* Fed lays out plan for tapering bond-buying program (Adds Fed minutes, updates prices)
Oct 13 (Reuters) - Gold prices rose 2% to a near one-month peak on Wednesday, as a pullback in the dollar and U.S. Treasury yields lifted demand for the safe-haven metal.
Spot gold was up 1.8% at $1,791.41 per ounce by 2:13 p.m. ET (1813 GMT).
U.S. gold futures settled 2% higher at $1,794.70.
Other precious metals also rose, with spot silver rising 2.5% to $23.09 per ounce, platinum gaining 1.2% to $1,019.54 and palladium adding 3.5% to $2,116.68.
“Gold is just following yields at the moment. The initial reaction after CPI (consumer price index) data was a big spike in yields, which is now starting to fade away,” said Daniel Pavilonis, senior market strategist at RJO Futures.
Gold initially pared gains as benchmark U.S. 10-year Treasury yields rose above 1.6% following data showing U.S. consumer prices increased solidly in September and were poised for a further rise in coming months.
But a subsequent pullback in yields, which reduced the opportunity cost of holding non-interest bearing gold, drove a strong rally in precious metals.
The metal also drew support from a slide in the dollar and worries that high inflation would hit global economic growth.
“Inflation expectations mixed with global growth concerns have made many investors nervous that the business and the consumer will be much weaker in the second half of 2022. Safe-haven flows are starting to come gold’s way,” Edward Moya, senior market analyst at brokerage OANDA, said in a note.
U.S. central bankers signaled they could start reducing their crisis-era support for the economy in mid-November, though they remain divided over how much of a threat high inflation poses and how soon they may need to raise interest rates in response, minutes from their Sept. 21-22 policy meeting showed.
Meanwhile, a group of banks that partnered with the London Metal Exchange to launch gold and silver futures in 2017 is preparing to abandon the project after hoped-for volumes did not materialise.
Reporting by Brijesh Patel in Bengaluru; Editing by Vinay Dwivedi and Maju Samuel
Our Standards: The Thomson Reuters Trust Principles.