Gold prices edged higher on Thursday, as a slight pullback in Treasury yields offered some respite from a robust dollar, while investors looked forward to more U.S. economic data to gauge the outlook for interest rates, reports Reuters.
Spot gold was up 0.3 per cent at $1,922.70 per ounce by 1213 GMT, after hitting a one-week low on Wednesday. US gold futures were up 0.1 per cent at $1,946.80.
"Quite clearly we've seen a reversal in U.S. economic data from weakness to strength recently and that once again added to expectation that the Federal Reserve may not yet be done hiking rates," said Ole Hansen, Saxo Bank's head of commodity strategy.
"In addition, the dollar has reached fresh six-month highs... Gold continues to be very data-dependent, we have initial jobless claims later in the day but the significant one will be CPI (consumer price index) data due next week."
The dollar held firm near its highest since March after stronger-than-expected US services sector data. Meanwhile, benchmark 10-year Treasury yields slipped from a two-week peak scaled in the previous session.
Boston Fed President Susan Collins on Wednesday called for the central bank to take its next monetary policy steps carefully, while acknowledging signs of progress in cooling inflation.
According to the CME FedWatch tool, traders see a 93 per cent chance of the Fed leaving rates unchanged at its Sept. 19-20 meeting.
Higher US interest rates raise the opportunity cost of holding gold, which does not earn any interest.
US economic growth was "modest" in recent weeks amid cooling job growth and inflation in most parts of the country, the Fed's "Beige Book" published on Wednesday showed.
Investors will keep an eye out for US initial jobless claims data due at 08:30 a.m. EDT (1230 GMT) for more clarity on labour market conditions.
Silver fell 0.7 per cent to $23.02 per ounce, platinum lost 0.8 per cent to $901.19 and palladium slipped 1.6 per cent to $1,195.02.
