Gold prices eased on Thursday, after hitting a more than three-week high earlier, as an uptick in the U.S. dollar and Treasury yields undermined the support from expectations of rate cuts by the Federal Reserve early next year.
Spot gold lost 0.5% to $2,066.86 per ounce, after rising as high as $2,088.29 earlier, the most since Dec. 4, when bullion hit its all-time peak.
U.S. gold futures settled down 0.8% at $2,077.2.
"There's not a lot of trading volume right now in any of the markets so that usually causes smaller moves, especially when we're approaching a big number like an all-time high," said Chris Gaffney, president of world markets at EverBank.
"The reason prices have gone back near the horizon and rallied again towards the end of the year is all about interest rate expectations and a weaker dollar."
The dollar index rose 0.2% after hitting a five-month low. Benchmark 10-year bond yields also rose, coming off their lowest levels since July.
U.S. jobless claims rose last week, indicating the labor market continues to cool in the year's fourth quarter.
Investors are betting on an 88% chance of the Fed cutting rates in March, according to the CME FedWatch tool.
Lower interest rates decrease the opportunity cost of holding non-yielding bullion.
"We look for higher gold prices over the next 12 months, with weaker economic data and lower inflation in the U.S. forcing the Fed to cut rates," UBS analyst Giovanni Staunovo said.
On the physical front, China's net gold imports via Hong Kong rose by about 37% in November from the previous month.
Spot silver fell 1% to $24.01 per ounce.
Platinum gained 0.6% to $1,003.00, after hitting its highest since June, while palladium dropped 1.7% to $1,134.40. Both autocatalytic metals were on track to log yearly declines.