Gold prices held steady on Thursday as a stronger U.S. dollar countered concerns that surging COVID-19 cases across Europe could slow the pace of economic recovery.

Spot gold was little changed at $1,733.48 per ounce by 0745 GMT. U.S. gold futures were down 0.1% to $1,732.20 per ounce.

"One of the issues for gold is there seems to be two camps -for those worried about new lockdowns in Europe and ...those who have a very positive view of the economic outlook," said Michael McCarthy, chief market strategist at CMC Markets, adding both these opposing scenarios were mildly supportive of gold.

Gold is also considered a hedge against inflation, which is likely spurred by widespread stimulus to boost economic growth.

U.S. Federal Reserve members indicated on Wednesday that the central bank will start to raise rates depending on economic outcomes and that it will not reduce monetary policy accommodation until it sees actual improvements. 

Making gold expensive for holders of non-U.S. currencies, the dollar index jumped to fresh four-month highs on concerns about extended economic lockdowns in Europe and potential U.S. tax hikes. 

U.S. Treasury yields dipped, with the market appearing to stabilise after benchmark yields reached one-year highs last week. 

"Stabilising bond yields, sanguine comments from the U.S. Fed are keeping gold in a range without much direction," said Michael Langford, director at corporate advisory AirGuide.

In other metals, palladium was flat at $2,634.50 and platinum was down 0.2% at $1,164.99.

Silver shed 0.4% to $24.96, having fallen to a more than two-week low of $24.93 earlier in the session.

(Reporting by Asha Sistla in Bengaluru; Editing by Devika Syamnath and Subhranshu Sahu) ((Asha.Sistla@thomsonreuters.com; If within U.S. +1 646 223 8780; outside U.S. +91 80 6182 2808; Reuters Messaging: Reuters Messaging: asha.sistla.thomsonreuters.com@reuters.net))