*
Dollar hits three-week low
*
Dovish Fed pivot key for gold to regain its allure - analyst
*
Focus also on U.S. GDP on Thursday, PCE numbers on Friday
Oct 26 (Reuters) - Gold rose on Wednesday, as the dollar and U.S. Treasury yields fell amid expectations that the Federal Reserve might signal a slowdown in the pace of its interest rate hikes.
Spot gold gained 0.7% to $1,663.26 per ounce by 0644 GMT, while U.S. gold futures rose 0.6% to $1,667.10.
"With the bearish positioning for gold prices, the possibility of a strong near-term rally could be on the table if any indications of a rate slowdown is presented from the Fed," said IG market strategist Yeap Jun Rong.
Yields on the 10-year Treasury note fell as weak U.S. data fuelled speculation of a less hawkish Fed, while the dollar index touched its lowest level since Oct. 5, lifting gold's appeal for those holding other currencies.
Data on Tuesday showed 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 labor market.
While the Fed is still widely expected to deliver a 75-basis-point rate hike in November, it's also likely to debate how much higher it can safely push borrowing costs.
Rising rates dim non-yielding bullion's appeal.
"A calibration in the pace of Fed tightening may slow the pace of gold's decline but a dovish pivot would be key for gold prices to regain its allure," Christopher Wong, a currency strategist at OCBC, said in a note.
Gold could attract "consolidative" trades near term, with technical support at $1,617 an ounce likely to hold and resistance around $1,694, Wong added.
Investors are also focussing on the U.S. GDP and a European Central Bank meeting on Thursday, followed by U.S. core inflation numbers on Friday.
Silver rose 1.1% to $19.56 per ounce, platinum gained 0.9% to $922.90 and palladium climbed 2.1% to $1,963.81. (Reporting by Eileen Soreng in Bengaluru; Editing by Rashmi Aich)
