Gold was flat in a narrow range on Thursday, first dipping as the dollar rose and then rising as the dollar moved lower, but bullion`s gains were limited by higher U.S. Treasury yields.
Financial market players were concerned about a possible U.S. government shutdown, but this did not move gold very much.
U.S. gold futures
In the previous session, spot gold fell 0.8 percent, its biggest daily percentage decline since Dec. 7 as the U.S. dollar bounced from three-year lows.
"We’ve seen the relationship between dollar and gold hold pretty steady," said Chris Gaffney president of world markets at St. Louis-based EverBank.
In early trade, the U.S. dollar index <.dxy> fell on worries over a possible U.S. government shutdown as global investors sought to diversify their holdings into other currencies. Shortly after, the greenback recovered some of the losses.
The 10-year U.S. Treasury yield hit its highest since March 2017 at 2.61 percent
"I think you`ll also see yields rising with interest rates," pressuring gold, added Mike O’Donnell, market strategist RJO Futures in Chicago.
Spot gold is expected to fall to $1,311 per ounce, as it has broken a support at $1,329, according to Reuters technical analyst Wang Tao.
Some analysts said gold could draw some support from the current correction in digital currencies.
"Brokers in Europe report investors have increasingly been asking about switching from cryptocurrencies into gold," ANZ analysts said in a research note.
In other precious metals, silver
Over the past 15 years, platinum has largely moved higher in January and February due to seasonally weaker supply from top producer South Africa, Menke said.
"This seasonal rebound is playing out. And there is also some more room from short covering from the futures market."
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)