By Maytaal Angel
The dollar slipped slightly from a 4-1/2 month peak hit as long-term U.S. Treasury yields held near the psychologically important 3 percent level. A strong dollar makes dollar-priced gold costlier for non-U.S. investors.
U.S. President Donald Trump on Tuesday withdrew the United States from an international nuclear accord with Iran, raising the risk of conlfict in the Middle East and increasing the appeal of safe-haven assets such as gold.
"We've seen a turnaround in (the dollar) in the last few weeks, but actually gold hasn't gone down as far as you might think, so political tensions are helping," said Macquarie commodities strategist Matthew Turner.
Turner added, however, that the dollar was the main driver for gold and he expects the precious metal to come under pressure in the near term, with the dollar extending its rally.
Spot gold rose by 0.2 percent to $1,315.28 an ounce by 0959 GMT. U.S. gold futures for June delivery were also up 0.2 percent at $1,315.50.
U.S. consumer prices data due at 1230 GMT is expected to show that annual core CPI inflation rose to its highest in more than a year in April, strengthening the case for the Federal Reserve to raise interest rates.
After reduced growth data in the euro zone and Britain in recent weeks, the Fed remains the only major central bank that appears to be on course for rate increases.
Elsewhere, North American gold-backed exchange-traded funds registered inflows in April at their highest level since September 2017, with safe-haven purchases ushered in by a trade stand-off between the United States and China, Syria tensions and worries about possible U.S. sanctions on Russia.
After Trump's announcement on the U.S. withdrawal from the Iran nuclear deal, Israel said on Thursday that it had attacked nearly all of Iran's military infrastructure in Syria after Tehran fired rockets at Israeli-held territory for the first time.
Spot gold looks neutral in a range of $1,302-$1,317 an ounce, said Reuters technical analyst Wang Tao.
In other precious metals, silver gained 0.6 percent to $16.59 an ounce after hitting a two-week high at $16.62 in the previous session.
Platinum rose 0.9 percent to $918.20 while palladium edged up by 0.1 percent to $975.72.
(Additional reporting by Apeksha Nair in Bengaluru; Editing by David Goodman)
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)