Bullion initially jumped on Wednesday after the US consumer price index decelerated by more than expected in July -- suggesting the Fed could be less aggressive in raising interest rates -- but ended 0.1% lower despite the dollar weakening favorably.

Some traders pared bets on tightening, with a half-point rate increase being re-established as the likeliest outcome next month, as opposed to another three-quarter point hike.

On Thursday, data showed producer prices falling 0.5% from a month earlier, compared with economist’s median estimate of a small gain. US jobless claims also came in lower than expected, painting a favorable picture of the health of the economy.

Still, two Fed officials responded to Wednesday’s softening inflation by saying it doesn’t change the central bank’s path toward even higher interest rates. Minneapolis Fed President Neel Kashkari said that he wants the benchmark rate at 3.9% by the end of this year and at 4.4% by the end of 2023, adding that it wasn’t realistic to conclude the Fed will start cutting early next year.

His counterpart in Chicago, Charles Evans, said inflation remains “unacceptably high” and that he expects “that we will be increasing rates the rest of this year and into next year to make sure inflation gets back to our 2% objective.”

“Despite the improvement, inflation is still well above Fed’s target level and one reading may not be enough to change their tightening stance,” said Madhavi Mehta, a senior analyst at Kotak Securities Ltd. “Easing inflationary pressure also reduces gold’s demand as an inflation hedge.”

Spot gold added 0.1% to $1,794.70 an ounce as of 1:39 p.m. in London. Prices rose as much as 0.8% on Wednesday to the highest since July 5. The Bloomberg Dollar Spot Index weakened 0.3% after dropping 1% in the previous session. Silver fell, while platinum and palladium climbed.