* GRAPHIC-2022 asset returns: http://tmsnrt.rs/2jvdmXl
* Gold needs to break above $1,870 for fresh momentum - analyst
* Focus on U.S. CPI data on Friday for rate hike cues
* World Bank cuts 2022 global growth forecast (Recasts, adds comments, updates prices)
By Eileen Soreng
June 8 (Reuters) - Gold prices slipped on Wednesday as the dollar and U.S. Treasury yields rallied in the run-up to the last inflation reading before this month's policy meeting of the Federal Reserve.
"The sentiment is quite confused and that is leading to this sideways trading in the markets," said Saxo Bank analyst Ole Hansen, adding gold needs to break above the $1,870 price level to get some fresh momentum.
"Both the yield and dollar developments are not favourable (for gold) ... but against that we have got the World Bank downgrade of global growth ringing in the ears."
The World Bank on Tuesday slashed its 2022 global growth forecast by nearly a third and warned of rising risk of stagflation, providing some support to safe-haven gold.
The focus was on U.S. consumer price data due on Friday which could provide clues on whether the Fed will continue with its aggressive policy stance in the second half of the year.
The U.S. central bank is widely expected to raise interest
rates at its meeting this month, a prospect that helped the
dollar index rise 0.2% and kept the 10-year U.S. Treasury
While gold is viewed as a hedge against inflation and a safe asset during political and economic uncertainties, higher interest rates increase the opportunity cost of holding the non-yielding asset.
Consumers and businesses are being squeezed by higher inflation and rising interest rates, casting uncertainty over the economic outlook, said Clifford Bennett, chief economist at ACY Securities.
"It may prove very rewarding over the next 1-2 years to be invested in gold," he added.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.