Gold settled about 2 percent higher on Thursday, near its highest level in two weeks, after minutes of the latest Federal Reserve policy meeting drove markets to push back expectations for the likely timing of an interest rate rise.
U.S. gold futures settled $19.30 higher at $1,225.30 an ounce, up 1.6 percent on the day, after touching a two-week high of $1,234 an ounce earlier.
Spot gold rose to its highest since Sept. 23 at $1,233.20 an ounce early on Thursday and was trading up 0.3 percent at $1,225.
It rebounded nearly 4 percent from a 15-month low of $1,183.46 hit on Monday, under pressure from better than expected U.S. jobs data.
``The dollar may have overshot a little bit which means short covering for gold,'' Julius Baer analyst Carsten Menke said.
``The key reason we are longer term bearish on gold is that we expect investment demand to continue to fade because of the economic recovery in the United States, which means that the Fed will ultimately hike interest rates.''
The dollar recovered from a two-week low against a basket of major currencies after positive U.S. jobless claims data.
Minutes of the Federal Reserve's Sept. 16-17 meeting, released on Wednesday, showed that Fed officials want to tie an interest-rate rise to U.S. economic progress, though they expressed concern about the dual threat of a rising dollar and economic slowdown in Europe and Asia.