Gold was little changed on Thursday as investors awaited clarity on the ongoing trade talks between Washington and Beijing and the US government shutdown, with a strong dollar and stock markets pinning prices near $1,300 an ounce.
Spot gold was steady at $1,305.78 per ounce as of 1101 GMT. US gold futures were down 0.4 percent at $1,309.30.
"The market has been relatively quiet. The dollar is very firm, particularly against Japanese yen and Swiss francs, and because of that the market is a little bit on the softer side," said Afshin Nabavi, senior vice president at MKS SA.
The dollar index rose to a two-month high, making bullion costlier for investors holding other currencies.
Also denting gold's appeal were higher stocks, with European shares climbing to a three-month high on optimism about US-China trade talks.
Investors were hoping for a breakthrough in the trade impasse between the world's two largest economies. US President Donald Trump said on Wednesday the talks were "going along very well".
Meanwhile, the US Congress aimed to end a dispute over border security with legislation that would ignore Trump's request for $5.7 billion to help build a wall on the US-Mexico border, but avoid a partial government shutdown. The bill will be cleared for signing into law if it passes the Senate and House of Representatives. Without the legislation, about a quarter of federal government agencies would be forced into partial shutdown for lack of operating funds.
"We are not going to have a huge movement in gold until we find what is going on with the potential shutdown in the US and also the meeting with China," Nabavi said.
Gold prices touched a more than one-week high of $1,318.12 on Wednesday, but pared gains later in the session as the greenback benefited from sustained strength in core US inflation.
"A strong dollar is pressuring gold prices and physical buying is also limited," said Peter Fung, head of dealing at Wing Fung Precious Metals in Hong Kong.
"Gold should be range-bound around $1,305-$1,315 levels as it lacks a direction until the trade talks are over."
With gold unable to break higher, outflows rose from the world's largest gold-backed ETF, SPDR Gold Trust. Holdings have fallen over 3 percent so far this month.
Elsewhere, palladium rose 0.8 percent to $1,405.69 per ounce. Platinum was down 0.1 percent at $783.02 per ounce, while silver rose 0.2 percent to $15.59.
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