Gold rose 1 percent on Thursday, rebounding from near six-year lows as indications from the U.S. Federal Reserve that it may move cautiously into the rate hiking cycle weighed on the dollar and prompted investors to cover short positions.
Fed officials on Wednesday continued to flag December as a likely time for U.S. interest rates to rise after seven years near zero, but the central bank signaled an intention to proceed slowly and steadily after that.
Rising rates tend to weigh on gold, as they lift the opportunity cost of holding non-yielding bullion, while boosting the dollar, in which it is priced. Expectations that rates will rise have pushed gold prices down 9 percent this year.
Spot gold was up 1 percent at $1,082.40 an ounce, after rising as much as 1.5 percent to $1,086.10. The metal hit its weakest since February 2010 on Wednesday at $1,064.85.
U.S. gold futures for December delivery settled up 0.9 percent at $1,077.90.