Gold was flat in a narrow range on Thursday, first dipping as the dollar rose and then rising as the dollar moved lower, but bullion's gains were limited by higher US Treasury yields. Financial market players were concerned about a possible US government shutdown, but this did not move gold very much.
Spot gold was unchanged at $1,327.61 an ounce by 1:49 pm EST (1849 GMT). Earlier in the session, it touched its lowest since January 12 at $1,323.70. US gold futures for February delivery settled down $12, or 0.9 percent, at $1,327.20 per ounce.
In the previous session, spot gold fell 0.8 percent, its biggest daily percentage decline since December 7 as the US dollar bounced from three-year lows."We've seen the relationship between dollar and gold hold pretty steady," said Chris Gaffney president of world markets at St. Louis-based EverBank.
Spot gold is expected to fall to $1,311 per ounce, as it has broken a support at $1,329, according to Reuters technical analyst Wang Tao. Some analysts said gold could draw some support from the current correction in digital currencies.
"Brokers in Europe report investors have increasingly been asking about switching from cryptocurrencies into gold," ANZ analysts said in a research note. In other precious metals, silver gained 0.3 percent at $16.96 per ounce and palladium shed 1.2 percent at $1,101.99.
Platinum added 0.57 percent at $1,002.40 per ounce, after touching its highest since September 8 at $1,007.60 in the previous session.
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