Gold consolidates near all-time high on US rate cut hopes

"It's a continuation of the idea... propagated by the Powell speech the other day that the Federal Reserve is getting set to cut rates," said Bart Melek, head of commodity strategies at TD Securities.

"That typically is a very accretive thing for gold, particularly since it looks like they (the Fed) are quite prepared to reduce interest rates at a time where inflation is going to be significantly above their 2% target."

Fed officials including U.S. central bank chief Jerome Powell on Wednesday continued focusing on the need for more debate and data before interest rates are cut, a move financial markets expect to occur in June.

Data showed the number of Americans filing new claims for unemployment benefits increased more than expected last week as labor market conditions gradually ease.

Focus now shifts to U.S. March non-farm payrolls due on Friday that could shed more light on the timing of the Fed's first rate cut.

Strong central bank buying and safe-haven inflows amid growing geopolitical tensions have boosted demand for gold, helping to drive the price up more than 25% since October.

"It's heavily overbought and needs to correct to blow some of the froth. Fed cuts are priced in, in my view," said StoneX analyst Rhona O'Connell.

Elsewhere, spot fell 1.2% to $26.88 per ounce after hitting its highest since June 2021. Platinum rose 0.2% to $938.60 and palladium gained 1.4% to $1,028.50.