Gold prices rose to a one-month high on Thursday after the European Central Bank (ECB) pledged to keep interest rates steady through the summer of 2019 and investors fretted over weak Chinese data. The precious metal's upside, however, was capped by a firmer dollar and a slightly more hawkish US Federal Reserve.
Spot gold gained 0.3 percent at $1,303.70 per ounce by 1:32 p.m. EDT (1732 GMT) after peaking at $1,309.30. US gold futures for August delivery settled up $7, or 0.5 percent, at $1,308.30 per ounce.
The ECB said it would end its unprecedented bond purchase scheme by the close of the year, but signalled that this would not mean rapid policy tightening in the coming months. "The ECB ... has now delivered an intrinsically hawkish announcement (i.e., the end of QE) in a dovish tone," Luigi Speranza, head of European market economics at BNP Paribas, said in a note.
Higher interest rates generally depress the price of gold, a non-interest bearing asset. "Trade tensions ... are supportive for gold but having said that we don't think the upside is open because there are headwinds coming from the global recovery ... and the fact that the Fed is more hawkish," said Societe Generale analyst Robin Bhar.
Silver climbed 1.4 percent to $17.24 an ounce, after hitting $17.32 an ounce, its highest since April 19. Platinum rose 0.6 percent to $904.50 an ounce after touching a two-week high of $912.80, while palladium gained 0.2 percent at $1,010.90.