Gold prices drifted lower on Friday as the dollar steadied, although soft US economic data reinforced expectations that the Federal Reserve would pause its tightening cycle after delivering one more rate hike next month.

Spot gold was down 0.1% at $2,001.75 per ounce, as of 0342 GMT, after rising 1% on Thursday. US gold futures fell 0.3% to $2,013.70.

Gold prices have been moderating in the absence of real incoming news flow and “we really need to see some bigger pieces of information to give it that directional conviction”, said Ilya Spivak, head of global macro at Tastylive.

Data on Thursday showed the number of Americans filing new claims for unemployment benefits increased moderately last week, suggesting the labour market was gradually slowing.

Separately, a report showed factory activity in the mid-Atlantic region plunged to the lowest in nearly three years in April.

“Gold pushed back above $2,000/oz as the weaker economic outlook is enticing safe-haven buying,” ANZ said in a note.

Cleveland Fed President Loretta Mester said on Thursday the US central bank still has more interest rate increases ahead of it, but noted the aggressive move to boost the borrowing cost over the last year to quash high inflation is nearing its end.

The CME FedWatch tool shows that markets are pricing in an 82.1% chance of a 25 basis-point hike in May, which underpinned the dollar and made bullion less affordable for overseas buyers.

The greenback eyed its first weekly gain in over a month. Rate hikes raise the opportunity cost of holding non-interest-bearing gold.

Gold climbs back above $2,000 on dollar retreat

The Purchasing Managers’ Index data due later in the day will be “an interesting window into what’s going on, then another big break until we see the US GDP and PCE numbers next week,” Spivak said.

Spot silver dipped 0.3% to $25.22 per ounce, while platinum was flat at $1,093.33 and palladium rose 0.5% to $1,594.26.