Gold settled higher on Wednesday, halting its longest losing streak in nearly six months amid expectations the Federal Reserve will extend its monetary stimulus.
Trading volume was weaker than usual, a sign that the record-high equities market has weighed down on bullion investor interest.
Spot gold was last up 0.5 percent to $1,318 an ounce. The metal had dropped 3 percent over the past seven sessions, which matched the longest losing streak set in early May.
U.S. gold futures for December delivery settled $9.70 lower at $1,317.80.
On Monday, one senior Federal Reserve official said the U.S. central bank should scale back its asset purchases only when the U.S. economy shows clearer signs of improvement and even then it should act slowly, while two others stressed there is no need to rush.
However, last week's strong U.S. manufacturing activity report left some market watchers to speculate that the Fed could taper its bond-buying stimulus before year-end.
"We expect U.S. economic data to continue to have an outsized impact on gold for the near term,'' said James Steel, HSBC chief metals analyst. "Given the recent string of better-than-expected U.S. economic data, gold may test the $1,300 an ounce level ahead of the payrolls report.''
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