Gold prices fell on Thursday as the US dollar regained ground ahead of major central bank meetings as their economies grapple with broadening inflationary risks.
Spot gold was tumbled 0.1 percent at $1,805.58, as of 0539 GMT, after rising to $1,810.86 in the previous session, its highest since January 27. US gold futures lost 0.2 percent to $1,806.10.
Markets expect the Bank of England to raise interest rates again after hiking its interest rate to 0.25 percent from its historic low of 0.1 percent. The central bank signal further unwinding of its pandemic stimulus later in the day. However, the European Central Bank is set to keep policy unchanged but acknowledge surging inflation.
"Rate expectations are the primary driver of gold right now," Reuters quoted as saying IG Markets analyst Kyle Rodda.
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"There's been some reprieve for gold in recent days from some comments from a handful of Fed speakers, who have hosed down some fears of aggressive tightening."
Gold is considered a hedge against inflation, but it could see demand take a hit from higher rates as a non-interest-paying asset.
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While the US Federal Reserve is expected to hike interest rates in March, policymakers spoke cautiously this week about what might follow, given an uncertain outlook for inflation, as the pandemic hits business activity.
The dollar index firmed against its rivals, curbing demand for the greenback-priced bullion among buyers holding other currencies.
"There is presently a very high correlation between the U.S. dollar movement and gold price direction with little else influencing prices over the last few trading sessions," said Michael Langford, director at corporate advisory AirGuide, who expects gold to keep treading water around $1,800 an ounce.
In other metals, spot silver fell 0.4 percent to $22.53 an ounce, while platinum was up 0.1 percent at $1,034.09 and palladium added 0.3 percent to $2,377.36.
-With agency inputs
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