Gold inched higher on Thursday as stocks and U.S. bond yields pulled back to offset a firmer dollar and restore some of bullion's allure as a safe haven.
Spot gold had risen 0.1% to $1,804.45 per ounce by 1:33 p.m. ET. U.S. gold futures settled 0.1% higher at $1,805.40.
Benchmark U.S. Treasury yields retreated after hitting a near one-week high and stocks paired initial gains as risk sentiment was curbed by data showing U.S. jobless claims rose unexpectedly to two-month highs, channeling some inflows to bullion.
"Real interest rates are deeply negative, which shows that inflation is running hot, and there's no chance the U.S. Federal Reserve can make real rates positive short-term, so you have people coming to the realization that you need to own gold," said Michael Matousek, head trader at U.S. Global Investors.
Gold also took support from a European Central Bank pledge to keep interest rates at record lows for even longer.
"Both the U.S. Fed and the ECB are pretty much in sync in delivering a lower interest rate environment for longer and that should be positive for gold over the long-term," said Edward Moya, senior market analyst at OANDA.
The Fed's policy meeting next week follows comments from Chair Jerome Powell which suggested that the central bank would remain accommodative despite recent spikes in inflation readings.
But "gold's persistent weakness against real yields points to a vulnerable micro-structure and its inability to rally despite ongoing risk-off highlights that speculative flows remain particularly weak, reinforcing the potential for a deeper pullback," TD securities wrote in a note.
Elsewhere, silver was up 0.3% at $25.29 per ounce, palladium gained 1.9% to $2,704.01 and platinum rose 0.8% to $1,088.43.