Gold held steady after the Federal Open Market Committee minutes were released on Wednesday. The meeting, which took place three weeks ago, is the first since President Donald Trump took office.
In the minutes, the Fed concluded that another rate hike could loom on the horizon.
Spot gold inched up 0.15 percent $1,237.73 per ounce, while U.S. gold futures settled at $1,233.30. Spot gold dropped as much as 1 percent to touch a one-week low of $1,225.73 in the previous session.
"The key thing is that geopolitics and inflation have nudged themselves to the top of the queue as the key drivers of gold," said Ross Norman, CEO of Sharps Pixley.
Philadelphia Fed President Patrick Harker had previously suggested he would support an interest rate increase at a mid-March policy meeting as long as inflation, output and other data until then continue to show the U.S. economy is growing.
Gold is highly sensitive to rising U.S. interest rates, which increase the opportunity cost of holding non-yielding bullion, while also boosting the dollar.
"Our economists expect three rate hikes in 2017 and see the probability of a rate hike by June at 80 percent, and we see U.S. long dated real rates rising slightly, placing downward pressure on gold," Goldman Sachs said in a note.
Investors were awaiting an address by Trump to Congress due next week at which he is expected to announce tax policies.
Among other precious metals, gained 0.22 percent to $17.98 an ounce.
rose 0.49 percent to $1,003.10 while dipped 1.54 percent to $766.97.
"Strength in palladium is still remarkable given that car sales have been somewhat weak in January, especially in China," Menke said.
"I'd say that palladium prices and sentiment should come under pressure once we get more evidence that China is indeed weaker."