Gold steadied off a three-weak peak paring some gains as the dollar and yields ticked up, while investors gauged the fallout of another jump in U.S. inflation that could give the Federal Reserve more ammunition to aggressively hike rates.
Spot gold inched up 0.1% to $1,758 per ounce by 10:39 ET (1439 GMT), having earlier hit a peak since July 6 at $1,767.79. U.S. gold futures rose 0.3% to $1,774.50 per ounce.
"If we got some more problematic price inflation numbers, the Fed would have to be more aggressive and that could be getting to the marketplace too," said Jim Wyckoff, senior analyst at Kitco Metals.
"We're still in a (gold) price downtrend on the daily bar chart for August gold futures. However, prices have rebounded well from the July low, to begin suggesting that the gold market has put in a near term bottom."
The U.S. personal consumption expenditures (PCE) price index jumped 1.0% last month, the largest increase since September 2005.
The data gave a small fillip to the dollar, with U.S. Treasury yields also ticking up, making gold more expensive for overseas buyers.
Gold has shed over $300 since climbing past the $2,000-per-ounce level in March, as the Fed embarked on a rapid rate hike path while the dollar also emerged as a preferred refuge amid growing recession risks. Gold was also bound for its fourth straight monthly drop.
Higher rates increase the opportunity cost of holding non-yielding gold while boosting the dollar.
But gold got some respite, bouncing over 1%, from perception of a relatively less aggressive stance from Fed Chair Jerome Powell on Wednesday following an expected 75 basis-point hike.
Silver rose 0.8% to $20.13 per ounce, platinum was up 0.4% at $891.57 and palladium jumped 1.4% to $2,107.73.Meanwhile, second biggest gold consumer India launched its first international bullion exchange to bring transparency to the market.