Gold prices rose on Thursday set to snap a three-day losing streak, helped by a weaker dollar and as signs of cooling U.S. inflation raised bets on smaller rate hikes by the U.S. Federal Reserve.
Spot gold rose 0.4% to $1,910.44 per ounce by 0942 GMT. U.S. gold futures gained 0.3% to $1,912.00.
There was a flight to safety after disappointing U.S. economic data that had a negative impact on investor sentiment, in turn benefiting gold, said ActivTrades senior analyst Ricardo Evangelista.
"This dynamic also reinforces the narrative that the Fed will now be more likely to slow down its ongoing rate hikes...and this creates a downside for the dollar and is once again positive for gold."
Data on Wednesday showed U.S. retail sales fell by the most in a year in December, while producer prices fell more than expected last month, offering more evidence that inflation was receding.
Traders are pricing in a 25-basis point rate hike at the Fed's Jan. 31-Feb. 1 meeting. The U.S. central bank slowed its pace of hikes to 50 bps in December after four straight 75-bp increases.FEDWATCH
Lower interest rates tend to boost bullion's appeal as they decrease the opportunity cost of holding the non-yielding asset.
