The most active gold contract for April delivery fell 3.60 U.S. dollars, or 0.18 percent, to close at 2,030.70 dollars per ounce.
In a presentation to the Peterson Institute for International Economics on Thursday, Federal Reserve Vice Chair Philip Jefferson said that "if the economy evolves broadly as expected, it will likely be appropriate to begin dialing back our policy restraint later this year."
"I remain cautiously optimistic about our progress on inflation," Jefferson said.
Economic data released on Thursday were mixed. The U.S. Labor Department reported that U.S. initial claims for state unemployment benefits dropped 12,000 to a seasonally adjusted 201,000 for the week ending Feb. 17.
The S&P flash U.S. manufacturing purchasing managers index (PMI) rose to a 17-month high of 51.5 in February.
The S&P flash U.S. services PMI dipped to a three-month low of 51.3.
U.S. gross domestic product report will be released on Wednesday.
Silver for March delivery fell 9.00 cents, or 0.39 percent, to close at 22.784 dollars per ounce. Platinum for April delivery rose 15.90 dollars, or 1.79 percent, to close at 905.50 dollars per ounce.
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