LONDON: Gold prices slipped below $1,660 an ounce in Europe on Thursday, extending their retreat from two-week highs into a third session, as the dollar recovered from a near one-month low and crude oil prices turned lower.
Spot gold was down 0.5 percent at $1,655.59 an ounce at 0928 GMT. It has struggled for traction after a rally early in the week sparked by Federal Reserve hints that accommodative monetary policy is set to persist and remains stalled below $1,700 an ounce.
"We see some flow from Asian buyers, both from the bank-side of the market and from physical dealers," Credit Suisse analyst Tom Kendall said. "At the same time, there's not a huge amount of selling pressure in gold right now either, so there's a lack of meaningful direction or flow on both sides."
He said the market attitude to gold was "fairly neutral".
"The market positioning is quite light compared to what it has been recently," he said. "I think we are now treading water in the gold market until the next meaningful announcement on US monetary policy, and I'd be looking forward to the next (Fed) meeting, which is on 24 and 25 April."
The ultra-loose policy of recent years has hurt the dollar and kept real interest rates, and hence the opportunity cost of holding gold, low.
Prices are awaiting fresh direction from US data, which on Thursday includes a final reading of fourth-quarter growth, weekly jobless claims and corporate profits numbers. Strong data may undermine the case for a fresh round of monetary easing.
The dollar remained on the back foot after falling to a near one-month low in early trade against a basket of six major currencies, down 0.1 percent. A softer dollar tends to support gold, which is priced in the US unit.
Oil prices surrendered early gains to turn lower, meanwhile.
European shares and safe-haven German bunds were little changed. Traders in the euro zone are awaiting direction from an Italian debt auction later in the day, a key measure of demand for debt issued by the bloc's lower-rated states.
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