(Reuters) - Gold prices inched up on Thursday on expectations that the U.S. Federal Reserve will hold rates steady this year, while investors hoped for developments in trade talks between Washington and Beijing.
Spot gold was up 0.2 percent at $1,308.20 per ounce, as of 0105 GMT.
U.S. gold futures were down 0.3 percent at $1,311.
U.S. consumer prices were unchanged for a third straight month in January, leading to the smallest annual increase in inflation in more than 1-1/2 years, which could allow the Federal Reserve to hold interest rates steady for a while.
Risk sentiment has remained high over the last 48 hours in the financial markets on rising expectations of a breakthrough in the trade impasse between United States and China which has led to a modest rally in global equities.
Spain's parliament rejected a draft 2019 budget on Wednesday after Catalan separatists turned their back on the government, pushing the country close to an early national election amid an increasingly fragmented political landscape.
BNP Paribas on Wednesday said it expects gold prices to average $1,330 per ounces in 2019 and $1,415 per ounces in 2020.
Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, dropped 0.26 percent to 796.85 tonnes on Wednesday from 798.89 tonnes on Tuesday.
Barrick Gold Corp on Wednesday forecast a double-digit jump in gold output this year, underscoring the growth potential of the world's largest publicly traded bullion producer after it bought rival Randgold Resources last month.
A deficit in the palladium market that has driven prices of the autocatalyst metal to record highs will widen dramatically this year, specialist materials company Johnson Matthey said in a report on Wednesday.
(Reporting by Nallur Sethuraman in Bengaluru, Editing by Sherry Jacob-Phillips)
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)