Spot gold rose 0.2 percent to $1,307.05 per ounce at 0705 GMT. U.S. gold futures for June delivery rose 0.2 percent to $1,307.60 per ounce.
• "The inflation numbers this week did point to a potential acceleration in those (interest) rate hikes... But after the FOMC meeting yesterday that appears to be less likely and so we're seeing assets such as gold being bought at the back of that," said ANZ analyst Daniel Hynes.
• Investors also awaited the U.S.-China trade talks between U.S. Treasury Secretary Steven Mnuchin and Chinese Vice Premier Liu He due on Thursday.
"Safe-haven buying has been absent, of late... But there have been some signals for the past few days that the negotiations won't be as smooth as expected so that would definitely be a focus, particularly now that we have gotten past the FOMC meeting," Hynes added.
• A breakthrough deal to fundamentally change China's economic policies is viewed as highly unlikely during the two-day meet, though a package of short-term Chinese measures could delay a U.S. decision to impose tariffs on $50 billion worth of Chinese exports.
• Spot gold may bounce again towards a resistance at $1,317 per ounce as it has found a strong support at $1,302, according to Reuters technical analyst Wang Tao.
• Meanwhile, gold demand posted its weakest start to the year in a decade, the World Gold Council said on Thursday, as prices of the metal stagnated and the threat of rising interest rates led investors to seek better returns elsewhere.
• Among other precious metals, spot silver rose 0.2 percent to $16.38 per ounce. Platinum climbed 0.4 percent to $893.74 per ounce, while palladium was up 0.5 percent to $964.50 per ounce.
• Gold demand slumped to its weakest first quarter since the global financial crisis, the World Gold Council said Thursday, as the prospect of rising interest rates led investors to pursue greater returns elsewhere.
Worldwide demand for gold totaled 973.5 tons in the first quarter of the year, according to the Council's latest report, down 7 percent year-on-year. The slump in demand for the precious metal also coincided with prices holding within their narrowest range of any quarter in more than a decade.
The trade group that represents the commodity blamed the fall on a 15 percent dip in investment in gold bars to 254.9 tons, as investors in the U.S., China and Germany held off from buying the yellow metal.
• Having defended the psychological support of $1,300 earlier this week, gold (XAU/USD) is now looking to scale the all-important 200-day moving average (MA) located at $1,308 in a convincing manner.
The yellow metal created a bullish inside day candle yesterday, signaling the sell-off from the April 11 high of $1,365 may have run out of steam.
So, the stage looks set for a short-term bull reversal. Gold could gain altitude if the US-China trade talks falter, leading to an ugly trade dispute and a wave of risk aversion in the global equities. Chinese state media have already expressed caution ahead of key trade talks with senior US officials in Beijing (scheduled today).
However, if things work out well between the US and China, then the resulting risk-on in action in the equities could push gold below $1,300.
Reference: FxStreet, Reuters
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