Gold prices drifted lower on Friday as the dollar steadied, although soft U.S. economic data reinforced expectations that the Federal Reserve would pause its tightening cycle after delivering one more rate hike next month.
Spot gold was down 0.1% at $2,001.75 U.S. per ounce, after rising 1% on Thursday. U.S. gold futures fell 0.3% to $2,013.70.
Data on Thursday showed the number of Americans filing new claims for unemployment benefits increased moderately last week, suggesting the labor market was gradually slowing.
Separately, a report showed factory activity in the mid-Atlantic region plunged to the lowest in nearly three years in April.
Cleveland Fed President Loretta Mester said on Thursday the U.S. central bank still has more interest rate increases ahead of it, but noted the aggressive move to boost the borrowing cost over the last year to quash high inflation is nearing its end.
The CME FedWatch tool shows that markets are pricing in an 82.1% chance of a 25 basis-point hike in May, which underpinned the dollar and made bullion less affordable for overseas buyers. The greenback eyed its first weekly gain in over a month.
Rate hikes raise the opportunity cost of holding non-interest-bearing gold.
Spot silver dipped 0.3% to $25.22 per ounce, while platinum was flat at $1,093.33 and palladium rose 0.5% to $1,594.26.
