Gold prices held steady on Thursday, hovering near a seven-month peak scaled in the previous session, as investors looked forward to U.S. jobs data that could influence the Federal Reserve’s policy trajectory.
Spot gold held its ground at $1,853.28 per ounce, as of 0637 GMT, after hitting its highest level since June 13 in the previous session.
U.S. gold futures edged 0.1% higher at $1,859.90.
The dollar index fell for a second straight session, making gold more attractive for other currency holders.
“Gold has had a good start to the year, helped by a weaker dollar and expectations that the Fed might slow its pace of rate hikes. Recession risks and central bank buying should also support bullion this year,” said Brian Lan, managing director at Singapore-based dealer GoldSilver Central.
“If the jobs data reflects that the rate hikes have taken a toll on the economy, then dollar might weaken further and benefit gold.”
The ADP National Employment Report is due at 1315 GMT. This will be followed by the U.S. Labor Department’s closely watched nonfarm payrolls (NFP) data on Friday.
Minutes of the Fed’s December policy meeting released on Wednesday showed that all officials agreed the U.S. central bank should slow the pace of its aggressive interest rate hikes.
Meanwhile, Minneapolis Fed President Neel Kashkari said on Wednesday that the Fed should continue hiking interest rates at its next few meetings at a minimum until it is sure that inflation has peaked.
Bullion is seen as a hedge against inflation and economic uncertainties, but higher interest rates tend to weigh on non-yielding gold.
Spot gold may test a resistance at $1,869 per ounce, a break above could lead to a gain at $1,883, according to Reuters technical analyst Wang Tao.
In other precious metals, spot silver edged 0.1% higher at $23.76, platinum lost 0.4% to $1,074.42 and palladium rose 0.7% to $1,800.75.
