Gold prices dipped in New York close on Thursday in volatile trade after hitting three-week highs earlier in the session as a set of better than expected U.S data lifted the dollar, while palladium notched a record peak on supply concerns. Spot gold slipped 0.4 percent to $1,307.23 per ounce as of 2 p.m. EDT (1800 GMT), having earlier hit $1,320.22, its highest level since Feb. 28. The metal was set to snap five consecutive sessions of gains.
However, US gold futures settled 0.4 percent higher at $1,307.3 an ounce. The number of Americans filing applications for unemployment benefits fell more than expected last week, and other data showed a measure of factory activity in the mid-Atlantic region rebounding sharply this month after heavy falls.
"The data was decent today with Philly Fed noticeably more robust and positive jobs data for the payrolls survey week," said Tai Wong, head of base and precious metals derivatives trading at BMO, adding that caused a momentary dip in gold prices.
"Gold's failure to extend gains above $1,320 has triggered some liquidation from long options positions and also fueled algorithms sensing short term weakness."
"The dollar index is pushing up and weighing on the gold market, equity markets are starting to come back," said Phil Streible, senior commodities strategist at RJO Futures in Chicago.
Higher interest rates raise the opportunity costs of holding gold, which earns nothing and costs money to store and insure.
Palladium touched an all-time high of $1,620.52 an ounce in the session, and was currently up 0.2 percent at $1,606.50 per ounce.
Analysts attribute this to concerns about a supply crunch in the autocatalyst metal. A possible temporary export ban on precious metal scrap from Russia and hopes of economic stimulus from China have also helped lift prices.
Meanwhile, platinum prices fell 0.5 percent to $854.50 per ounce, having earlier touched a three-week high of $875.15. Silver dropped 0.2 percent to $15.41.