US gold futures climbed 1 percent on Thursday as an initial dollar rally stalled, but bullion could still head lower in the near term, dealers said. June contract on Comex division of New York Mercantile Exchange up $8.00 at $879.20 an ounce at 10:32 am EDT (1432 GMT). Ranged $866.40 to $881.50.
The euro rallied, recovering from a two-month low against the dollar after the European Central Bank left interest rates unchanged, making dollar-denominated bullion. Gold tends to discount the inflation threat if the monetary authority is perceived as vigilant, and gold prices could come under pressure if the Federal Reserve seen as vigilant on inflation, HSBC Metals Analyst James Steel said.
An imminent gold sale by the International Monetary Fund is unlikely as the proposal still required the approval of the traditionally anti-sales US Congress, Steel added. Spot gold was quoted at $877.05/878.05, compared with $870.85/872.05 at the close Wednesday. July platinum was up $36, or 1.8 percent, at $2,005 an ounce. June palladium was up $7.00, or 1.6 percent, at $432.75 an ounce. July silver was up 21.0 cents, or 1.3 percent, at $16.905 an ounce, ranging from $16.510 to $16.925.
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