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Gold steadied on Thursday as a rally in the U.S. dollar showed signs of fatigue after the currency hit its highest in nearly 14 years against a basket of currencies the day before.

The dollar index, which measures the greenback against a basket of major currencies, slipped 0.13 percent to 100.280, as moderate U.S. inflation data drove a flattening of the U.S. Treasury yield curve.

"The dollar was higher and gold was sold. Now, the dollar has given away gains and gold is steady," said Yuichi Ikemizu, head of commodity trading at Standard Bank in Tokyo. "It has found a bottom around $1,220 and looks firm." "We need something for gold to follow. At this moment there is nothing supporting movement and investors are sidelined," Ikemizu added.

"Since the gold market has absorbed the likelihood of a December rate rise, we do not think Mr. Bullard's rate comments were especially price-negative," said James Steel, chief metals analyst for HSBC Securities.

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Reference: Bloomberg, Reuters