Middle East tensions provide support for gold firms as the dollar softens.

On Thursday, gold prices increased due to a weaker dollar and rising tensions in the Middle East, with investors anticipating additional U.S. economic information to inform the Federal Reserve's interest rate forecast.

The price of gold edged 0.1% higher to $2,036.9 per ounce, as of 0328 GMT, after hitting its highest since Feb. 9 on Wednesday.

The greenback-priced bullion has become more appealing to overseas buyers due to the extended losses for the fourth straight day.

KCM Trade's chief market analyst, Tim Waterer, stated that the short-term outlook for gold is mixed, with rate-cutting timeline delays being somewhat offset by safe-haven demand from the geopolitical scenario.

The bombardment of Rafah in Gaza's south by Israel intensified, resulting in the death of over a dozen members of one family in an air strike. Meanwhile, the health ministry of the ruined Palestinian enclave announced that 29,313 deaths have occurred in the war so far.

Gold may benefit from rate cuts if there are any signs of economic weakness and we have manufacturing and services data due today, according to Waterer.

The deadline for submitting initial jobless claims is 1330 GMT, while the scheduled time for flash U.S. manufacturing and services data is 1445 GMT.

The Fed's latest policy meeting minutes, released on Wednesday, revealed that most policymakers were concerned about the risks of cutting interest rates too quickly.

The unexpected rise in consumer and wholesale prices in January complicates upcoming U.S. central bank interest rate decisions, according to Richmond Fed president Thomas Barkin.

The CME Fed Watch Tool indicates a 72% chance of a June interest rate cut, which makes holding non-yielding bullion more appealing.

Gold was up 0.3% at $885.30 per ounce, rose 0.6% to $955.63, and gained 0.1% to $22.89 per ounce.