By Zandi Shabalala
LONDON (Reuters) - Gold strengthened on Wednesday, with the price touching its highest in three weeks as the dollar languished near six-week lows and bond yields sank on uncertainty over the economic policies of U.S. President Donald Trump.
Spot gold was up 0.27 percent at $1,247.90 an ounce by 1256 GMT, close to the session high of $1,248.47.
A lack of concrete policy from the Trump administration is increasing gold's attraction as a safe-haven investment, analysts and traders said.
"It seems that equity investors decided to take some money off the table, perhaps getting slightly wary about the progress in President Trump's legislative agenda," said INTL FCStone analyst Edward Meir.
U.S. gold futures firmed slightly to $1,247.90.
The dollar index, which measures the greenback against a basket of currencies, was 0.1 percent softer, near the six-week low of 99.642 reached on Tuesday.
Gold was also supported by a further drop in U.S. Treasury yields, with the 10-year benchmark yield dipping below 2.4 percent for the first time since March 1.
Gold has rallied nearly $50 from last Wednesday's low and clocked its longest winning streak since early January after a less hawkish tone on interest rates in the U.S. Federal Reserve's latest policy statement.
"The repositioning of investors since the FOMC meeting continues unabated, with investors becoming less bearish as a result of the subdued outlook for rates in 2018," ANZ analysts said in a note.
Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 0.5 percent to 834.40 tonnes on Tuesday after three sessions of outflows.
In other precious metals, spot silver slipped by 0.2 percent to $17.52 an ounce, having hit a more than two-week high of $17.59 in the previous session.
Platinum gained 0.1 percent to $966.10 and palladium eased by 0.6 percent to $790.73. Palladium had peaked at $792.90 on Tuesday, its highest in more than a month.
(Additonal reporting by Nallur Sethuraman in Bengaluru; Editing by David Goodman)
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