Gold was mostly unchanged at under $1,090 per ounce on Thursday as investors mulled direction after President Barack Obama laid out plans to revive the U.S. economy in his State of the Union speech.
Spot gold [GCC1 1084.4 -13.50 (-1.23%) ] was little changed at $1,087.70 per ounce as of 0329 GMT, compared to New York's notional close of $1,087.25.
U.S. gold futures for February delivery rose 0.3 percent to $1,088.20 per ounce, compared to $1,087.90 at the close on the COMEX division of the New York Mercantile Exchange.Obama vowed to boost job growth and curb exploding deficits, as he recast his agenda after suffering a political setback.
The economic crisis from late 2008 boosted gold, which investors bought as a safe-haven asset.
Some market participants also noted that there was a dissenting voice in the Federal Reserve's decision on Wednesday to hold rates low.
Kansas City Federal Reserve Bank president dissented because he wanted the central bank to eliminate a phrase vowing to keep rates exceptionally low for "an extended period".
Low global interest rates and concern about inflation were both instrumental in boosting gold prices to record highs above $1,220 last December.
Gold is also often bought as a hedge against inflation, which erodes the value of paper assets.
Kazuhiko Saito, a chief analyst at Tokyo's Fujitomi Co Ltd, said the investment environment for gold was beginning to look poor, particularly as an interest rate hike appeared more likely
than it had at one point.
"I think gold might fall below $1,080 as sentiment is not good for the precious metal," he said.
Industry officials remain bullish over bullion's prospects for this year, however.
The chairman of Barrick Gold Corp , the world's largest gold producer, said on Wednesday that while gold prices may be volatile its upward climb was not over.
Peter Munk was speaking to Reuters Insider television from the World Economic Forum in Davos.
For the long term, traders and fund managers were on the whole positive about gold this year, with prices seen averaging $1,150.50 an ounce in a Reuters poll of 60 analysts.
Elsewhere, the world's largest gold-backed exchange-traded fund, SPDR Gold Trust [GLD 106.528 -1.032 (-0.96%) ] said its holdings stood at 1,111.922 tonnes as of Jan. 27, unchanged from the previous business day.
In contrast, the world's largest silver-backed exchange-traded fund, the iShares Silver Trust, said its silver holdings stood at 9,384.98 tonnes as of Jan. 27, inching up 0.5 percent from the previous business day.
