Firmer dollar, equities push gold to near 1-week low

Gold prices dipped to a near one-week low on Thursday, weighed down by a stronger dollar and as growing hopes of an economic recovery bolstered risk appetite.

Spot gold was down by 0.5% at $1,932.73 per ounce at 1205 GMT, having earlier fallen to $1,926.99.

US gold futures dipped 0.3% to $1,938.70.

"Gold is turning its eye more strongly to the USD relationship and the rally of the dollar has clearly taken a little bit of the shine away from gold," said independent analyst Ross Norman.

The dollar index rose for a third straight session against its rivals, making gold expensive for holders of other currencies.

Meanwhile, European shares hit an over one-month high.

Bolstering bets for a recovery from a pandemic-induced economic slump, an industry survey showed recovery in China's service sector activity extended into a fourth straight month in August.

But underlying themes, like rising virus cases in the United States, low-to-negative government bond yields, unprecedented monetary and fiscal stimulus, remain intact and this continues to limit gold's losses, said FXTM analyst Lukman Otunuga.

"In the near term, gold may remain in a wide range with support around $1,910 and resistance around $1,985."

Investors now await the initial weekly US jobless claims report due later in the day, as well as US payroll figures on Friday, for cues on the health of the world's largest economy.

The Federal Reserve, in its "Beige Book" report, highlighted that US business activity and employment ticked up through late-August, but economic growth was generally sluggish as COVID-19 hotspots hampered reopening.

Gold has gained over 27% so far this year, helped by ultra-loose monetary policy adopted by major central banks to combat the economic damage caused by the pandemic.

Elsewhere, silver fell 1.7% to $27.02 per ounce, while platinum fell 0.4% to $902.48 per ounce.

Palladium rose 3.8% to $2,333.48 per ounce, having hit its highest since April 1.