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• "Markets are trying to consolidate, trying to push up higher for now," said Benjamin Lu, a commodities analyst with Phillip Futures.

A balance between a host of factors such as a rate hike by the U.S. Federal Reserve in December, uncertainty about trade tensions between Washington and Beijing, and a flattening yield curve has helped create a premium for the bullion, Lu added.

Fed policymakers will gather at a Dec. 18-19 meeting, at which the central bank is widely expected to raise interest rates.

• "Although a rate hike is already priced in, markets will be closely watching the meeting for clues on rate hike timings in 2019," said Lukman Otunuga, a research analyst at FXTM, adding that: "if the meeting echoes a similar message to (Chairman Jerome) Powell's dovish shift, gold has the potential to shine into 2019."

• The dollar declined against the safe-haven yen as a spike in risk aversion pressured equities and U.S. Treasury yields. The spread between the two-year and five-year Treasury yields inverted this week and the two-year/10-year spread was at its flattest in more than a decade amid a sharp fall in long-term rates.

• "An yield curve inversion indicates higher borrowing cost in short term, so for safe-haven assets in the longer run it's going to be very positive," Phillip Futures' Lu said.

• Spot gold may test a resistance at $1,245 per ounce, a break above which could lead to a gain into a range of $1,253-$1,258, according to Reuters technical analyst Wang Tao

Meanwhile, palladium continued to be more valuable than gold after outshining the yellow metal for the first time since 2002 on Wednesday, with prices soaring by around 50 percent in less than four months to record levels.

• Spot palladium rose 0.1 percent to $1,245.00 per ounce, hovering near its record high hit in the previous session.

• The market now awaits Friday's U.S. non-farm payrolls data for November, which is expected to show unemployment remains at 3.7 percent.

• "Investors are seen adopting a cautious stance ahead of the U.S. jobs report which could offer insight over the health of the U.S. labour force," said FXTM's Otunuga.

• Amongst other metals, silver fell 0.7 percent to $14.41 per ounce, while platinum extended losses into a third session, declining 0.7 percent to $795.00per ounce.

• Gold is back up against strong resistance in the upper 1230s, lower 1240s (1243 the high). If this isn’t quickly overcome, look for gold to trade back down into the recent choppy price action and perhaps to the lower parallel of the developing bear-flag off the August low. If resistance can be overcome, however, then the 200-day near 1257 and upper part of the bear-flag may soon be met.