Gold prices were trading mixed on Thursday and the dollar gained ground after upbeat U.S. economic data released overnight lifted U.S. Treasury yields to levels not seen since 2011 and increased the likelihood of further rate hikes from the Federal Reserve.
Spot gold was marginally higher at $1,198.78 an ounce after falling around half a percent in the previous session. U.S. gold futures were down marginally at $1,202.00 an ounce.
Markets expect an 80 percent probability of a Fed rate rise in December and three more rate hikes in 2019, with risks to the upside.
Recent comments from Fed officials and Chair Jerome Powell have been generally hawkish as the U.S. experiences a remarkably positive set of economic circumstances.
Investors also kept an eye on Italy, where the coalition government set budget deficit target of 2.1 percent of GDP for 2020 and 1.8 percent of GDP for the following year.
The government needs to obtain European authorities' approval to keep the 2019 deficit level at 2.4 percent.
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