London: Gold prices held steady on Thursday as investors bought the metal after a recent drop, even as a strong US dollar and concerns about inflation continued to pressure the market.
Spot gold was trading near $ 5,150 per ounce after earlier falling nearly 1percent during the session. US gold futures were also slightly higher, trading around 5,159 dollars per ounce.
Market analysts said the stronger US dollar has been one of the main factors weighing on gold prices. When the dollar rises, gold becomes more expensive for buyers using other currencies, which can reduce global demand.
Fresh inflation data from the United States also added to the uncertainty in financial markets. Consumer prices in February rose by about 0.3 percent, indicating that inflation pressures remain. This has raised concerns that the US Federal Reserve may delay planned interest rate cuts.
Higher interest rates usually reduce the appeal of gold because the metal does not offer interest or yield compared with other financial assets.
However, gold prices found some support as investors continued to buy the metal when prices dipped. This dip buying helped the market recover after the early fall.
Geopolitical tensions are also supporting demand for gold as a safe haven asset. Ongoing conflicts and security concerns in the Middle East have created uncertainty in global markets, encouraging investors to hold gold as a protective investment.
Rising oil prices have also increased fears of higher global inflation, which could influence central bank policies in the coming months.
Market experts say gold may continue to move within a narrow range in the short term as traders watch the strength of the dollar, inflation trends and signals from the US Federal Reserve about future interest rate decisions.