Gold is sensitive to high interest rates, which increase the opportunity cost of holding zero-yield bullion.
Spot gold was up 0.2% at $1,879.35 per ounce, as of 0334 GMT. U.S. gold futures were little changed at $1,891.10.
"Gold has entered a consolidation phase, which means it is trading in narrow ranges and bouncing between technical levels," said Matt Simpson, a senior market analyst at City Index.
The dollar index eased 0.1%, making dollar-priced gold a more attractive bet for overseas buyers. [USD/]
Fed officials said on Wednesday more rate hikes are in the cards as the U.S. central bank pushes to cool inflation, with Fed Governor Christopher Waller saying while wage growth has slowed, the decline is "not enough" and that "the Fed will need to keep a tight stance of monetary policy for some time."
The comments were seen as hawkish by the markets, which has kept a lid on gold prices, although Fed Chair Powell's less hawkish-than-expected comments on Tuesday helped gold remain above last week's lows, said City Index's Simpson, adding there may be "volatility on the lower side" in prices leading into the inflation data due next week.
The U.S. Labor Department's consumer price report will be keenly watched by investors for clues on the Fed's future monetary policy stance.
Market participants are expecting the Fed's target rate to peak at 5.132% in July, from a current range of 4.5% to 4.75%.
U.S. President Joe Biden said on Wednesday he did not believe the U.S. economy would fall into recession either this year or next year.
Spot silver edged 0.2% higher at $22.36 per ounce, platinum rose 0.4% to $973.86 and palladium added 0.4% to $1,656.15.
(Reporting by Kavya Guduru in Bengaluru; Editing by Subhranshu Sahu, Nivedita Bhattacharjee)
By Kavya Guduru
