Gold steadied on Thursday as a weaker dollar and lower U.S. yields lent support, with investors wagering that policy tightening in the United States would be glacial at best, though gains were capped by surging global stock markets.
The dollar was steady against a currency basket, having fallen to its lowest since last October after U.S. Federal Reserve Chair Janet Yellen struck a less hawkish than expected tone in testimony before Congress on Wednesday.
A weaker U.S. currency makes dollar-priced gold cheaper for non-U.S. investors. Denting gold's safe-haven appeal, however, the MSCI world index hit a record high for the fourth time in less than a month as investors took Yellen's remarks as a green light for risk-taking.
"Risk off is what we need for gold to really come to life. When stock markets do fall, which I think is only a matter of time, then we'll see gold rise sharply," said Forex.com analyst Fawad Razaqzada. "Until then it's still a range-bound market."