Gold retreated from a 1-1/2-week high hit on Wednesday, amid weak physical demand from large buyers in Asia and as the dollar soared.
The precious metal slipped to a low of $1097.11 an ounce, while currently trading around 1099.20, compared to the session’s opening at $1100.92.
The rise in domestic prices in both China and India caused a decline on physical demand to push gold prices lower on Thursday.
Analysts predict the increase in physical buying from China next week, as the Lunar New Year approaches, but the purchase may not be strong enough.
The slowdown in Chinese economy may weigh on the purchases, where data released this week showed the economy expanded at the slowest pace in 25 years in 2015.
While gold strengthened on Wednesday amid the sharp selling on global equities, it failed to rise despite the further fall in Asian shares.
The Shanghai Composite index slipped 3.23 percent and the Japan’s Nikkei 225 index subtracted 2.43 percent.
The dollar, on the other side, rose against a basket of major currencies to hover around 99.15, according to the dollar index.
The rise in the dollar discouraged some demand on bullion as an alternative investment.
Later in the day, the U.S. will release manufacturing and jobless claims data, where investors will give utmost attention to the ECB policy meeting.
