Gold rose on Wednesday as the dollar retreated after weekly data showed an increase in US jobless claims, though bullion's gains were seen as limited by a recovery in equity markets.
Spot gold rose 0.4 per cent to $1,225.76 per ounce by 1408 GMT, having moved in an $8 range ahead of the US Thanksgiving holiday. It hit its highest since November 7 on Tuesday at $1,228.79.
US gold futures rose 0.4 per cent to $1,226.30 per ounce.
Gold, which sometimes benefits from volatility in the wider markets, ended Tuesday lower as investors sought refuge in the dollar from a slide in world stocks and oil prices, but the metal fared better than other commodities, analysts said.
"The big sell-off in equity markets, the big sell-off in oil helped to prop up gold prices, maybe not to a degree many would expect, but it did hold up relatively well compared to the rest of the commodities," ING analyst Warren Patterson said.
The dollar weakened against a basket of currencies after U.S. jobless claims rose to a more than four-month high. The greenback posted its biggest daily percentage gain in two weeks on Tuesday as a sell-off in world stocks spurred safe-haven bids. .
"Gold is benefiting from a cross-asset bounce and the dollar is also a little bit softer. We are seeing this across a wide spread of commodities," said Marcus Garvey, commodities strategist at ICBC Standard Bank.
"(For gold) to really be able to break out (of the current narrow range), you need a longer period of dollar softness."
The US unit, weakness in which makes gold cheaper for holders of other currencies, has also been pressured this week by dovish comments from US Federal Reserve officials, which cast doubt over the pace of monetary tightening.
Meanwhile, world stocks steadied following a sell-off in the previous session.
Investors were now looking to a G20 summit in Argentina later this month, when US President Donald Trump is expected to meet Chinese President Xi Jinping to discuss their trade dispute.
"If a deal is reached then the gold price could drop as reduced economic uncertainty leads to lower safe-haven demand," Heraeus said in a note.
Silver climbed 0.9 per cent to $14.44 an ounce. It hit its highest since November 8 at $14.49 in the previous session.
Palladium gained 0.8 per cent to $1,149.90 per ounce, while platinum was up 1.2 per cent at $847.70 per ounce.
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