Gold prices eased on Thursday after hitting a 4-1/2-month high in the previous session, hurt by an uptick in the US dollar and bond yields, while investors awaited key economic readings out of the United States.

FUNDAMENTALS

Spot gold fell 0.2% to $1,892.42 per ounce by 0100 GMT, after hitting its highest since Jan.8 at $1,912.50 on Wednesday.

US gold futures declined 0.4% to $1,894 per ounce.

The dollar index was up 0.1% against rivals, moving further away from a 4-1/2-month low hit earlier this week and making gold more expensive for other currency holders.

Benchmark US Treasury yields rose to 1.58%, increasing the opportunity cost of holding non-interest bearing gold.

On Wednesday, Fed vice chair for supervision Randal Quarles said he was prepared to open talks on reducing the central bank's emergency support measures, only to also stress the need to remain patient.

Federal Reserve officials have downplayed rising price pressures and affirmed their support to keep monetary policy accommodative for some time.

Market participants now await key US economic data, including gross domestic product, jobless claims and consumer spending.

South Korea's central bank kept monetary policy unchanged on Thursday as a surge in coronavirus cases threatened an export-led economic recovery.

The European Central Bank should not reduce the pace of asset purchases from next month, ECB board member Fabio Panetta said on Wednesday, joining a growing chorus of policymakers calling for continued stimulus.

SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings fell 0.2% to 1,044.08 tonnes on Wednesday from 1,046.12 tonnes on Tuesday.

Palladium fell 0.2% to $2,739.71 per ounce, silver slipped 0.4% to $27.59 and platinum dipped 0.7% to $1,183.59.