Gold prices steadied on Thursday and moved in a narrow range, hovering near the highest level in nearly seven months, with investors awaiting a key reading on inflation to determine whether US interest rate cuts will come sooner than expected.

By 0543 GMT, gold in spot transactions fell 0.1 percent to $2,041.76 per ounce, after recording its highest levels since May 5 on Wednesday, and is heading for the second monthly gain in a row. The yellow metal was trading in a range of about five dollars on Thursday.

US gold futures for December delivery fell 0.2 percent to $2,042.40 an ounce.

Federal Reserve officials indicated this week the possibility of lowering interest rates in the coming months and expected growth to slow and inflation to continue to decline.

Lower interest rates reduce the opportunity cost of holding non-yielding bullion.

The dollar index fell close to its lowest levels in three months, making gold less expensive for holders of other currencies.

As for other precious metals, silver in spot transactions fell 0.2 percent to $24.95 per ounce. Platinum fell 0.2 percent to $930.24. Palladium fell 0.4 percent to $1,023.42 an ounce.