Gold prices edged lower on Thursday as Treasury yields gained, after the appeal of bullion was somewhat restored by minutes of a US Federal Reserve policy meeting that showed the central bank was unlikely to get more aggressive on interest rate hikes.
Spot gold dipped 0.2% to $1,849.75 per ounce, as of 0220 GMT. US gold futures gained 0.1% to $1,848.20.
Gold cut some dollar strength-driven losses on Wednesday after notes from the Fed's May meeting suggested the central bank would raise interest rates by 50 basis points in June and July to combat inflation they agreed had become a key threat to the economy's performance.
It was positive for gold that the Fed will put in two more half-percentage-point hikes and then wait to see its economic impact, said Michael McCarthy, chief strategy officer at Tiger Brokers, Australia.
But gold's response has been quiet disappointing, with the minutes also boosting risk sentiment, McCarthy said.
Higher short-term US interest rates and bond yields raise the opportunity cost of holding bullion, which yields nothing. Gold is, however, seen as a safe-haven asset during financial crises.
Wall Street ended higher on Wednesday as investors were heartened by the fact that Fed policymakers unanimously felt the US economy was very strong as they grappled with reining in inflation without triggering a recession.
It looks like the beginning of an uptrend in gold, and prices might see a bottom at current levels around $1,850 per ounce, and potentially some moves towards $1,900, McCarthy said.
SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings rose 0.2% to 1,069.81 tonnes on Wednesday from 1,068.07 tonnes in the prior day.
Spot silver dipped 0.5% to $21.86 per ounce, platinum eased 0.1% at $943.15 and palladium was little changed at $2,006.61.