Spot gold was down 0.3% at $1,912.48 per ounce, as of 0328 GMT, after rising more than 1% on Wednesday. U.S. gold futures shed 0.8% to $1,915.10.
"Investors are looking for a safe asset to park their money in after the U.S. banking sector crisis, this has triggered fresh rallies in a gold-like safe haven," said Hareesh V, head of commodity research at Geojit Financial Services.
"Today's fall is attributed to a technical correction from an (over) five-week high and a steady dollar. Investors are keenly waiting for fresh cues on the U.S. banking crisis."
Shares of Credit Suisse slumped by as much as 30% on Wednesday after the lender's largest shareholder said it could not provide further support, just days after the collapse of U.S. banks Silicon Valley Bank and Signature Bank.
Swiss regulators pledged a liquidity lifeline to Credit Suisse in an unprecedented move by a central bank.
Safe-haven currencies such as the U.S. dollar were in demand on Thursday. Gold competes with the dollar as a safe store of value, and gains in the currency make bullion less attractive for overseas buyers. [USD/]
Markets are now pricing in a 65% chance for a 25-basis-point hike at the U.S. Federal Reserve's March meeting.
Bullion is considered a hedge against economic uncertainties, although higher rates increase the opportunity cost of holding the non-yielding asset.
"Longer-term, gold's strong average performance in the lead-up to and following both initial Fed rate cuts and U.S. recessions keeps us biased for higher prices as macro uncertainty swirls," analysts at JP Morgan said in a note, adding that they expect gold to top $2,000/oz this year.
Spot silver slipped 0.4% to $21.71 per ounce, platinum was 0.3% lower at $959.52, while palladium gained 1.3% at $1,465.91.
(Reporting by Kavya Guduru in Bengaluru; Editing by Sherry Jacob-Phillips)
By Kavya Guduru
