The most active gold contract for February delivery rose 19.9 U.S. dollars, or 1.06 percent, to close at 1,898.8 dollars per ounce.
The U.S. Labor Department reported Thursday that the U.S. consumer price index, a measure of the U.S. cost of living, fell 0.1 percent in December, matching a decline forecast by economists. The annual rate of the index fell for the sixth month in a row to 6.5 percent from 7.1 percent, the lowest level in more than a year.
Market analysts note the decline may indicate that U.S. inflation has peaked.
The U.S. dollar index and treasury yields fell after the data were released, supporting gold.
The U.S. Labor Department reported Thursday that U.S. initial jobless claims fell 1,000 to a seasonally adjusted 205,000 in the week ending Jan. 7. Better than expected data capped gold's rise somewhat.
Addressing a virtual event hosted by the Wisconsin Bankers Association on Thursday, St. Louis Fed President James Bullard said the U.S. central bank should raise interest rates to above 5 percent expeditiously to ensure price pressures are subdued.
Silver for March delivery rose 52.3 cents, or 2.23 percent, to close at 24.004 dollars per ounce. Platinum for April delivery was unchanged from the previous trading session, closing at 1,084.3 dollars per ounce.
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