Gold steadied on Thursday off the previous day's near eight-year peak as investors' appetite for higher-risk assets like stocks improved following encouraging coronavirus vaccine trials, and ahead of U.S. jobs data later in the day.
Spot gold was little changed at $1,770.79 per ounce by 0945 GMT, easing from a near eight-year high of $1,788.96 it hit on Wednesday. U.S. gold futures GCcv1 rose 0.2% to $1,783.60 per ounce.
"Investors are betting on stock markets rather than on gold. The short-term scenario is a risk-on mood," said ActivTrades chief analyst Carlo Alberto De Casa.
However investment demand in gold as a hedge will remain elevated, offsetting a dip in jewellery and industrial consumption of the physical metal, he added.
Lowering the cost of holding gold for other currency holders, the dollar .DXY slipped to a one-week low versus rivals.
Encouraging economic data worldwide and hopes for a coronavirus vaccine pushed European stocks to a near one-week high, with focus turning to June U.S. employment data and weekly initial jobless claims data due later in the day.
Economists polled by Reuters expect 3 million U.S. jobs to have been added in June, which would be the most since the government started keeping records in 1939, though a surge in coronavirus cases threatens the fledgling recovery.
Gold's overall trajectory remained positive, analysts said, with large monetary stimulus packages to cushion economies from the fallout of pandemic-induced lockdowns, among other factors, having helped gold prices rise 16.7% so far this year.
"The central banks are providing liquidity to the market and this is changing the relative yield structure in asset markets," said Quantitative Commodity Research analyst Peter Fertig.
"With flooding the markets (with liquidity), there is an incentive to invest in gold and not only riskier markets."
Elsewhere, palladium fell 0.2% to $1,901.31 per ounce, platinum steadied at $816.05 per ounce, while silver fell 0.1% to $17.92 per ounce.
(Reporting by Nakul Iyer in Bengaluru; Editing by Jan Harvey) ((firstname.lastname@example.org; Within U.S. +1 646 223 8780, Outside U.S. +91 80 6749 0417; Reuters Messaging: email@example.com))