Gold pares gains to trade steady as oil rises on Iran proposal to bar 'hostile' vessels in Hormuz

Among other metals, spot silver XAG= fell 0.9% to $61.54 per ounce.

Platinum XPT= lost 0.6% to $1,724.64, and palladium XPD= rose 0.6% to $1,371.48.

Gold pared earlier gains to trade steady on Thursday, as oil prices rose following reports of Iran reviewing restrictions on "hostile" vessels in the Strait of Hormuz, reigniting inflation fears and rate hike expectations.

Spot gold XAU= was little changed at $4,244.29 per ounce by 2:50 p.m. EDT (1850 GMT), after having hit its highest level since June 18 earlier in the session. The yellow metal climbed over 4% on Wednesday, its largest daily gain since February.

U.S. gold futures GCcv1 settled around 0.1% lower at $4,299.60.

The Federal Reserve outlook remains the main driver for gold and Friday's U.S. jobs data will influence what the central bank says on interest rates, said Bob Haberkorn, senior market strategist at StoneX.

Traders are currently pricing in about a 57% chance of a rate hike at the central bank's September meeting, and an 84% chance of a hike in December, according to the CME FedWatch Tool. FEDWATCH/

Higher interest rates raise the opportunity cost of holding non-yielding bullion, making gold less attractive to investors.

"A lot of money that was on the sidelines started coming back into gold yesterday with some technical levels being breached," Haberkorn said.

Bullion was still down around 24% from a record high of $5,594.82/oz hit in late January.