"If OPEC ends up achieving its objective, it could significantly change the outlook for global inflation and the need to have a hedge (potentially through gold) against higher inflation," said Danske Bank senior analyst Jens Pedersen.
Division between Federal Reserve policymakers on when to raise U.S. interest rates has sapped investor enthusiasm for trading on comments by officials from the central bank.
"The gold and dollar markets are currently without very strong direction. The mixed views from U.S. Fed officials have weakened their credibility and the market has stopped buying (on) their comments," said Jiang Shu, chief analyst at Shandong Gold Group.
UBS Strategist Joni Teves said in a note that the expectation that low inflation should keep yields down and Fed policy easy, means gold prices will move higher.
"Our expectation of much lower long-end real yields supports our positive gold outlook, and an environment of 'low for longer' would be a conducive backdrop for gold's next leg higher," Teves said, forecasting an average gold price of $1,400 in 2017.
— CNBC's Fred Imbert contributed to this report.