Spot gold rose 0.1% to $1,978.89 per ounce by 0748 GMT, close to its highest at $1,987.39 since mid-May.
U.S. gold futures also gained 0.1% to $1,981.80.
A weaker dollar and inflation prints coming in lower have supported gold, said Brian Lan of Singapore dealer GoldSilver Central.
The dollar index was 0.1% lower, close to a more than one-year low, making gold cheaper for holders of other currencies. [USD/]
The Fed is expected to raise rates by 25 basis points (bps) at its meeting next week, keeping them in the 5.25%-5.5% range in 2023, according to CME’s FedWatch tool.
“We’ve already seen that the market hasn’t gone into a recession, I don’t think there is an urgent need to cut (rates) back (in 2023),” Lan added.
Lower interest rates reduce the opportunity cost of holding the non-yielding bullion.
Investor focus is on initial U.S. jobless claims data for the week to July 15 later in the day, which is forecast to rise to 242,000 from a seasonally adjusted 237,000.
“I think if we see jobless claims flat to higher, I’d expect a positive move on gold,” said Baden Moore, head of carbon and commodity strategy, National Australia Bank.
A bullish flag suggests a higher target of $2,013. Support is fixed at $1,981, a break below which could open the way towards $1,971-$1,977 range, said Reuters technical analyst Wang Tao.
The Bank of England is due to meet in the first week of August but before that central bank meetings in Japan, Europe and the U.S. will likely grab investors’ attention.
Spot silver was little changed at $25.16 per ounce, platinum fell 0.2% to $971.48 and palladium slid 0.8% to $1,296.75.
