Gold steadied after its first decline this week, as some traders turned to longer-term U.S. Treasury bonds and the dollar instead of the precious metal.
Bullion traded near $3,300 an ounce, reversing gains made on Thursday, and is still up nearly 3% this week after buying the safe-haven asset following a Moody's downgrade of the U.S. rating.
The world's largest economy faces a precarious fiscal situation, with a growing debt pile and rising interest payments that could lead to higher borrowing costs and make it harder to reduce the deficit.
The precious metal has surged by about a quarter this year, and is about $200 shy of an all-time high hit last month. Along with the safe-haven asset's support amid rising trade and geopolitical concerns, it has also been supported by diversification away from dollar-denominated assets by governments and private investors.
Gold was little changed at $3,297.02 an ounce at 6:14 a.m. in Singapore, after closing 0.6% lower in the previous session. The Bloomberg Dollar Spot Index rose 0.2% on Thursday. Silver and palladium were flat, while platinum rose.
Source: Bloomberg
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