Gold prices firmed on Wednesday as the dollar weakened, with investors awaiting the US Federal Reserve's latest policy meeting minutes and inflation data for signs of how close interest rates are to peaking.

Spot gold rose 0.4% to $2,010.23 per ounce by 0921 GMT. US gold futures gained 0.2% to $2,024.30.

US consumer price index (CPI) data is due at 1230 GMT and the Fed's minutes of the March meeting at 1800 GMT.

"The Fed minutes will be closely scrutinized for key insight into how policymakers evaluated the need for higher rates despite the turmoil in the banking sector," said Lukman Otunuga, senior research analyst at FXTM.

The IMF said lingering financial system vulnerabilities could erupt into a new crisis, but urged member countries to keep tightening monetary policy to fight inflation.

"Gold has the potential to glitter from an economic downturn, but higher rates are likely to cap gains for the zero-yielding asset," Otunuga highlighted.

Gold meanwhile drew strength as the dollar slipped, making gold cheaper for holders of other currencies.

Euro zone markets see two 25-basis point moves as priced in, while investors are split over a third hike as the European Central Bank focuses on reducing price pressures.

Philadelphia Fed Bank President Patrick Harker on Tuesday said he feels the Fed may finish raising rates once they exceed 5%.

Bond markets are positioning and trading for a hotter-than-expected CPI print, but gold and silver are ignoring these signals and remaining quite bid, metals firm MKS PAMP said in a note.

While gold is seen as a hedge against inflation, higher rates to bring down prices tend to weigh on non-yielding gold's appeal.

Spot silver was steady at $25.08 per ounce, platinum was up 0.5% to $999.25 and palladium rose 0.4% to $1,452.41.