Gold held steady for a second day, as traders weighed the outlook for more interest-rate hikes in the US following comments from an ex-policymaker.

Former Federal Reserve Vice Chair Richard Clarida said the bank would probably raise rates again in this cycle and would be unlikely to cut them until next year. Traders increasingly expect the Fed to hold rates steady at its June meeting, keeping the option for hikes later on.

Gold has been consolidating around $1,950 an ounce in recent weeks, as investors await clearer indications for direction of US monetary policy. Holdings in exchange-traded funds backed by the precious metal have flatlined this month after creeping higher since March.

A stronger dollar has helped keep a lid on bullion, with gains in the greenback fueled by markets paring bets on interest rate cuts, according to Vivek Dhar, commodities analyst at Commonwealth Bank of Australia.

The World Bank sounded caution over the global economy, which is in a precarious situation as sharp interest-rate increases damp activity and stir vulnerabilities in lower-income countries. Those fears could support gold as a safe haven in the longer term.

Investors are on the lookout for support from Beijing for China's tepid economic recovery, after authorities asked the nation's biggest banks to lower their deposit rates. They're also considering a potential improvement to geopolitical relations, with US Secretary of State Antony Blinken set to have talks in coming weeks with top officials in China.

Spot gold declined 0.1% to $1,962.17 an ounce as of 10:26 a.m. in London. The Bloomberg Dollar Spot Index weakened slightly. Platinum and palladium climbed, while silver steadied.

Source: Bloomberg