Gold steadied as investors pulled away from risky assets and waited for more clues on the Federal Reserve's rate path.

Bullion traded near $3,180 an ounce, after dipping to the lowest level in more than a month earlier. Gold lost haven support in recent weeks as ebbing trade tensions between the US and China stoked risk-on sentiment, although that is now easing. 

On Wednesday, signs that there will be fewer Federal Reserve rate cuts than previously anticipated pushed gold to a slump of more than 2%. Traders now await a speech by Fed Chair Jerome Powell later on Thursday, as well as data on US manufacturing, retail sales, initial jobless claims and producer prices. 

Tighter monetary policy and higher yields tend to be negative for non-interest bearing gold, but they can also reduce the appetite for riskier assets like stocks and cryptocurrencies. 

Gold largely shrugged off comments from President Donald Trump, who said the US might be getting closer to an agreement with Iran to curb the Islamic Republic's nuclear program. An easing of geopolitical tensions sometimes leads to downward pressure on the safe-haven asset.

There could be further unwinding of long positions in gold, said Christopher Wong, a currency strategist at Oversea-Chinese Banking Corp. While some support should come in around $3,050-$3,150 an ounce, "gold may risk a deeper pullback towards $2,950 levels" if the support breaks, he said. 

Gold is still up by more than 20% this year, fueled by a rebound in demand for bullion-backed ETF products, strong central bank buying and speculative Chinese demand. Investors had feared trade tensions stemming from Trump's tariffs could spur faster inflation and a slowdown in growth, or even a recession.

Spot gold was little changed at $3,179.79 an ounce as of 12:18 p.m. in London. The Bloomberg Dollar Spot Index fell 0.2%. Silver fell, while palladium and platinum edged higher.

Source: Bloomberg