On the Comex division of the New York Mercantile Exchange, gold futures for August delivery traded at USD1,604.05 a troy ounce during early European trade, dipping 0.25%.
The August contract traded in between a tight range of USD1,606.95, the daily high and a session low of USD1,600.25 a troy ounce.
Prices rallied to USD1,609.45 a troy ounce on Wednesday, the highest since July 5.
Gold futures were likely to find support at USD1,562.45 a troy ounce, the low from July 23 and near-term resistance at USD1,624.05, the high from July 5.
Gold prices rallied Wednesday amid renewed speculation over the possibility of more easing from the Federal Reserve, ahead of its policy meeting next week.
The Wall Street Journal reported that a growing number of Fed officials have concluded that the central bank needs to expand its stimulus program in order to boost growth and increase job hiring.
Moves in the gold price this year have largely tracked shifting expectations as to whether the U.S. central bank would pump more money into the financial system.
Gold gained as much as 15% earlier this year to hit USD1,790 an ounce after the Fed said in January it would keep interest rates near zero until at least late 2014 and indicated that it could introduce a fresh round of asset-purchases.
However, prices have lost almost 12% since late February, as the Fed failed to deliver more easing and amid concerns over the euro zone’s deepening debt crisis, which has fueled demand for the precious metal's hedge, the greenback.
Gold traders are looking ahead to the Fed's next policy meeting on July 31 and August 1 for clues on the central bank's attitude towards a next round of bond purchases, known as quantitative easing.
Meanwhile, investors continued to monitor developments surrounding the euro zone’s ongoing debt crisis.
The euro strengthened broadly on Wednesday after European Central Bank Governing Council member Ewald Nowotny said there was an argument for giving the European Stability Mechanism a banking license, which would increase its firepower to fight the debt crisis in the euro zone.
But the euro came under renewed pressure after ECB President Mario Draghi appeared to reject the idea.
The yield on Spanish 10-year bonds was at 7.38% on Thursday, below Wednesday’s euro-era high of 7.74%, but still above the critical 7% threshold, widely considered unsustainable in the long term.
Elsewhere on the Comex, silver for September delivery shed 0.5% to trade at USD27.32 a troy ounce, while copper for September delivery eased down 0.1% to trade at USD3.371 a pound.
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