 "Gold")
Gold prices pared early gains on Thursday to hover near their lowest levels in more than a month, bruised by an elevated dollar and yields after the U.S. Federal Reserve signalled it might raise interest rates sooner than expected.
Gold is often seen as a hedge against inflation, though a rate hike by the Fed will increase the opportunity cost of holding bullion and dull its appeal.
Spot gold was steady at $1,813.80 per ounce, as of 0654 GMT, having climbed up to 0.7% earlier in the session on bargain-hunting.
U.S. gold futures were down 2.6% at $1,812.20 per ounce.
"Gold was crushed overnight by a more hawkish Fed. It has staged a modest recovery in Asia, but the rally looks more like speculative dip buying and fast money short-covering, than a vote of confidence in the yellow metal," said Jeffrey Halley, a senior market analyst at OANDA.
"The recovery in gold should be approached with caution as we have yet to see how a change in tone from the Fed will fully play out in markets. Gold's daily close below $1,797.50 will signal a deeper correction is in prospect."
Gold prices slipped more than 2.5% on Wednesday, hitting their lowest since May 6, after hawkish comments from Fed officials lifted the dollar to a two-month high, while U.S. Treasury yields jumped.
The Fed on Wednesday began closing the door on its pandemic-driven monetary policy with 11 of 18 central bank officials projecting at least two quarter-point interest rate increases for 2023..
"Bargain-hunting, safe-haven demand and buying the dips emerged as gold fell to $1,804, although the change in Fed's script had benefited the dollar and Treasury yields rather than precious metals in the immediate term," Avtar Sandu, a senior commodities manager at Phillip Futures, said in a note.
Silver was steady at $26.97 per ounce, while palladium dropped 1% to $2,770.72 and platinum was flat at $1,122.
(Reporting by Brijesh Patel in Bengaluru; Editing by Subhranshu Sahu and Sherry Jacob-Phillips)
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