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Minutes from the Fed’s March policy meeting released on Wednesday showed policymakers debated whether an interest rate hike would be needed in April, although a consensus emerged that risks from a global economic slowdown warranted a cautious approach.

"Risk appetite waned with renewed concern over the power of monetary policy. A weaker U.S. equity market lent support to global volatility and put gold again at centre stage for investors," ANZ analysts said in a note.

Markets were closely watching comments from Fed officials for clues about the timing of any rate hikes.

Central-bank buying of gold is likely to continue although at a slower pace, with China setting the pace so far this year, said UBS Thursday.

Nevertheless, UBS continued, “the slowdown in the pace of purchases is also noticeable.” The March Chinese buying amounted to around nine tonnes, down from 16 in January. First-quarter average monthly purchases were 12 tonnes, compared to 17 in 2015, the bank said.

“We expect this theme to be in place across the official sector this year – as FX reserves come off, the urgency to diversify is also somewhat diminished,” UBS said.

UBS suggested the risk of central-bank selling of gold is low.

Reference : Reuters, Scrap Monster