Gold retreats after recent rally as investors take profits

Aug. 20 (Reuters) - Gold prices retreated on Thursday following a more than 4% gain in the previous session, with a surprise U.S. Treasury liquidity move pushing bond yields and the dollar lower, while rising oil prices and hawkish U.S. Fed signals prompted profit-taking.

Spot gold XAU= was down 0.7% to $4,487.93 per ounce by 0946 GMT. Earlier, bullion was at $4,525.79, after prices climbed to a more than two-month peak on Wednesday.

U.S. gold futures GCcv1 were little changed at $4,544.50.

Morgan Stanley expects gold to exceed $5,000 an ounce in 2027, potentially sooner, as it sees the Fed staying on hold, but said U.S. inflation data could drive volatility while low COMEX short positions limit scope for further short-covering gains.

Although gold is generally viewed as an inflation hedge, rising interest rates tend to reduce the appeal of the non-yielding metal.