Gold prices edged up on Thursday buoyed by persistent inflation concerns, with further gains in bullion clipped by expectations that the Federal Reserve may hasten its monetary tightening to tame rising prices.
Spot gold rose 0.1% to $1,789.90 per ounce by 1119 GMT, recovering some ground after slipping to its lowest since Nov. 4 on Wednesday. US gold futures gained 0.4% to $1,791.20.
Trading is likely to be thinned by the US Thanksgiving holiday.
"Gold still has some recovery potential on anticipation of high inflation figures. But essentially, with the Fed pursuing the ongoing tapering, that should push up real rates at a later stage," keeping prices volatile, said UBS analyst Giovanni Staunovo.
Although bullion is considered a hedge against rising inflation, interest rate hikes tend to push government bond yields up and thereby raise the opportunity cost of holding gold.
A growing number of Fed policymakers indicated they would be open to speeding up the elimination of their bond-buying program if high inflation held and move more quickly to raise interest rates, minutes of the central bank's last policy meeting showed.
Gold breaks below $1,800 as dollar, yields firm on rate hike bets
In the wake of Wednesday's strong economic data from the U.S., including a sharp drop in weekly jobless claims, calls for a faster taper are expected to rise when the Fed meets next on Dec. 14-15, said CMC Markets UK's chief market analyst Michael Hewson in a note.
Gold also tracked moves in the dollar index, which eased off an over 16-month high.
"The prevailing sentiment is that the price of gold will be facing some headwinds," and bullion could face significant resistance around the $1,800 - $1,810 levels, said Ricardo Evangelista, senior analyst at ActivTrades.
Spot silver rose 0.2% to $23.58 per ounce, platinum gained 2.3% to $997.08, and palladium advanced 1.4% to $1,876.41.
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