Nevertheless, uncertainty lingers regarding whether gold prices can maintain the $1,900 per ounce threshold, given the prospects of persistently higher US interest rates. At the same time, the US dollar retains its resilience, hovering just below its nearly six-month peak, thereby restraining significant upward movements in gold prices.

The reduced likelihood of a US economic downturn has weighed on the safe-haven demand for gold. Recent data has indicated the ongoing resilience of the world’s largest economy, undermining gold’s appeal as a hedge.

Later on Thursday, market attention is expected to shift towards US producer inflation and retail sales data, which are anticipated to further underscore the economy’s strength. The backdrop of robust consumer inflation readings arrives just a week ahead of the Federal Reserve meeting, where widespread expectations suggest that the central bank will maintain its current stance on interest rates. However, it’s worth noting that the Fed might adopt a more hawkish outlook, particularly in response to the resurgence in inflation.

Market participants are also anticipating that the Fed will keep interest rates at levels not witnessed in over two decades until at least mid-2024, presenting a subdued outlook for gold. The precious metal has faced a challenging year due to the surge in interest rates, which increases the opportunity cost of holding non-yielding assets like gold, thereby limiting its appeal compared to assets such as the US dollar or Treasury bonds.

Meanwhile, European shares saw a decline in Wednesday’s trading session, with the industrial sector leading the downturn. Additionally, BP (NYSE: BP) shares suffered losses following the sudden departure of the oil company’s CEO. Investors remained vigilant ahead of the European Central Bank’s upcoming monetary policy decision scheduled for Thursday.