Gold steadies on dollar pullback; Fed rate-hike worries weigh

Gold prices were steady on Thursday due to a slight pullback in the dollar and bond yields, while gains were kept in check by signs of a resilient U.S. economy that could offer room for the Federal Reserve to raise interest rates further.

Spot gold was little changed at $1,836.39 per ounce by 1322 GMT, after hitting its lowest level since early January on Wednesday. U.S. gold futures rose 0.2% to $1,848.20.

Benchmark U.S. 10-year Treasury yields eased, while the dollar slipped 0.2% against its rivals after hitting a near six-week high on Wednesday, making gold cheaper for other currency holders.

"Gold is seeing a 'dead cat bounce' or a temporary recovery after a significant decline on some bargain hunting. Recession fears are lending some support to the gold market as is a modest correction in the dollar," independent analyst Ross Norman said.

For now, the path of least resistance is lower and bears have the upper hand, Norman added.

Gold prices have fallen 4.7% this month, on track for the biggest monthly drop since June 2021 if losses hold.

Strong retail sales numbers on Wednesday, after Tuesday's data showing stubbornly high U.S. inflation for last month, have reinforced concerns that the Fed would keep interest rates higher for longer given a resilient American economy.

Several Fed policymakers this week have signalled that more increases are needed to bring inflation down to the central bank's 2% target.

Higher interest rates discourage investment in non-yielding gold, although it is considered a hedge against inflation and economic uncertainty.

In the physical market, India's January gold imports plunged 76% from a year earlier to a 32-month low, a government source told Reuters.

Elsewhere, spot silver fell 0.3% to $21.57 per ounce, platinum fell 0.4% to $911.37, while palladium rose 0.5% to $1,471.07.