Gold prices rose on Thursday as the dollar weakened, while investors prepared for a series of U.S. economic data set to be released before next week's Federal Reserve monetary policy meeting.
By 02:30 GMT, spot gold had increased by 0.4 percent to $1,996.50 per ounce, while U.S. gold futures rose by 0.5 percent to $2,005.20.
In other precious metals, spot silver gained 0.5 percent to $25.02 per ounce. Platinum rose by 0.3 percent to $1,092.68, and palladium increased by 0.1 percent to $1,513.81.
The dollar index dropped by 0.1 percent during the day, making yellow metal less expensive for holders of other currencies.
Yesterday, the U.S. House of Representatives narrowly approved a bill to raise the government debt ceiling of $31.4 trillion.
At the same time, the market value of First Republic Bank declined again yesterday, as investors awaited to see if it could find buyers for its assets and change its status without government support.
Edward Mear, a metals analyst at Marex, stated that considering the "overall turbulent atmosphere for the banking situation and uncertainty regarding the debt ceiling," gold is likely to be more sensitive to upward than downward trends.
Gold, viewed as a safe haven, reached its highest level in a year at $2,048.71 in mid-April when the banking crisis unfolded, and weak economic readings in the U.S. bolstered bets on a pause in interest rate hikes.
Low interest rates enhance the appeal of non-yielding gold.
Traders will closely monitor the quarterly U.S. GDP data and weekly jobless claims set for release at 12:30 GMT, after data showed yesterday that new orders for key manufactured goods in the U.S. fell more than expected in March, while shipments declined, indicating that low spending on equipment may have led to a slowdown in economic growth in the first quarter of the year.
