NEW YORK: Gold slipped on Thursday after the dollar firmed and as data showed a big drop in the US jobless claims in the run up to an inflation report that could influence the Federal Reserve’s monetary strategy.

Spot gold was down 0.3% at $1,776.58 per ounce by 12:28 p.m. ET (1728 GMT), and US gold futures were down 0.5% to $1,777.20.

The number of Americans filing new claims for unemployment benefits dropped to the lowest in over 52 years.

“The stronger-than-expected jobless claims numbers along with a firmer dollar is pulling down on gold, but there are also traders waiting for the CPI data,” said Bob Haberkorn, senior market strategist at RJO Futures.

On the day, the dollar gained, making gold less attractive for overseas buyers.

“If inflation numbers are going to be high, then gold will bounce right back up and make a move towards $1,800,” added Haberkorn.

Friday’s US Consumer Price Index (CPI) report will be followed by the Fed’s policy meeting on Dec. 14-15.

Gold has traded in a relatively tight $1,760-$1,790 range since dropping below the key $1,800 level in late November, as investors attempted to gauge the pace at which the Fed would taper stimulus and hike interest rates.

While gold is considered an inflation hedge, higher interest rates would increase the opportunity cost of holding non-yielding bullion.

“Gold could see fresh bids if markets become fearful once more about pandemic-related developments or a ramp-up in geopolitical tensions between major economies,” said Han Tan, chief market analyst at Exinity.