Gold prices inched lower on Thursday as the dollar firmed amid expectations of higher US interest rates, but the precious metal continued to hold above a key support level of $1,200. Spot gold was down 0.4 percent at $1,202.02 an ounce at 0646 GMT, while US gold futures were down 0.3 percent at $1,207.80 an ounce.
Spot gold has been trading within an $8 range over the past two sessions, with investors keenly watching the psychological $1,200 level after the metal broke below that mark and hit a 1-1/2-year low of $1,159.96 early this month. "There is certainly some ambiguity following last week's Jackson Hole symposium where (Federal Reserve Chair Jerome) Powell was a little bit dovish in investors' point of view," ANZ analyst Daniel Hynes said.
"Investors are grappling amid positive data coming through (from the United States) and that's why prices are stuck just above $1,200 at the moment without any sort of clear outlook, especially around the rates for 2019."
Bullion investors' focus would now shift to the trade negotiations between the United States and China and its consequences, Hynes said.
"While a (relatively) stronger dollar and US economic growth are hurting the bullion's appeal, concerns that Turkey's financial crisis could spread may give the metal a reversal of fate," said Renisha Chainani, head of commodity and currency research at Monarch Networth Capital.