Gold prices rose slightly on Thursday, after hitting their lowest level in more than two weeks in the previous session, at a time when investors focused on the possibility of central banks raising interest rates to contain inflationary pressures.
The spot gold price increased 0.1 percent to $1994.83 an ounce by 0555 GMT. US gold futures remained stable at $2006.30.
The dollar index fell 0.1 percent. A weaker dollar would make gold less expensive for buyers holding other currencies.
Matt Simpson, a senior analyst at City Index, said that although gold fell below $ 1980 yesterday, investors were quick to seize the opportunity for a rapid decline and pushed prices in spot transactions again to exceed this major support level.
But he added, But we are also ready for the members of the Federal Reserve (the US central bank) to continue their tightening (with regard to monetary policy) in the period of silence that begins on Saturday before the next meeting of the Federal Reserve.
Council policies prohibit members of the Federal Open Market Policy and Interest Rate Decision Committee from speaking publicly or giving press interviews from the Saturday before the committee meeting until the Thursday after the meeting.
New York Federal Reserve Chairman John Williams said on Wednesday that inflation remains at problematic levels and the Federal Reserve will take action to bring it down.
Higher interest rates usually make gold less attractive, because they increase the opportunity cost of holding the non-yielding asset.
A Reuters poll showed that the Federal Reserve will raise interest rates by 25 basis points for the last time in May before stopping increases until the end of 2023.
As for other precious metals, silver fell in spot transactions by 0.2 percent to $ 25.21 an ounce, and platinum fell 0.8 percent to $ 1081.72, as well as palladium by 0.6 percent to $ 1607.14.
