Gold prices held steady on Thursday, holding close to a two-week high, as the dollar eased on rising expectations of an interest rate cut by the U.S. Federal Reserve.
Prices had jumped about 1.5% in the previous session as the dollar fell after weaker-than-expected U.S. housing data. The U.S. currency was last down about 0.1% against key rivals.
"The dollar has resumed lower, and this has allowed gold to find renewed buying interest following Wednesday's rally," said Fawad Razaqzada, market analyst with Forex.com.
Gold prices fell to a low of $1,414.36 earlier in the session, but recovered after the dollar eased.
"Gold's longer-term trend is in the bullish direction so traders are happy to keep fading the dips in what is a supportive fundamental backdrop with dollar and stocks struggling," Razaqzada said.
Increased bets on a Fed rate cut have kept gold well supported above $1,400 and overall momentum is positive, analysts said.
Interest rate futures traders are pricing in a 65% chance of a 25-basis-point cut this month and a 35% likelihood of a 50-basis-point cut, according to the CME Group's FedWatch tool.
"The anticipation of a rate cut has really driven a lot of the momentum we've seen lately. If we don't get the rate cut, gold is going to head back into $1,300," said Jeffrey Sica, founder, president and chief investment officer of SICA Wealth Management LLC.
Silver rose 1.1% to $16.14 per ounce, extending gains for a fifth straight session. It touched its highest since Feb. 20 at $16.21 earlier and posted its biggest one-day percentage gain in more than five months on Wednesday.
"There was a huge relativity gap (when gold rose to a multi-year high in June) so, I think there is some of that rotation. People are getting out of gold or paring length in gold and adding to length in silver," INTL FCStone analyst Edward Meir said.
"The (gold silver) ratio traders have been saying silver is cheap, so there is some ratio trading going on as well and silver charts looks very strong once we broke out that resistance at $15.50, that brought lots of fund buying."
Spot platinum was up 0.3% at $845.66, after touching a two-month peak of $852.32. Palladium fell 1.6% to $1,512.62 per ounce, after slipping to its lowest level in more than three weeks at $1,506.50.