2018.09.1314:45:00UTC+00Gold Futures Settle Lower

Despite gaining some ground early on in the session amid easing concerns about U.S.-China trade dispute, gold futures retreated and settled in negative territory on Thursday as the dollar pulled off the day's lows.

The greenback turned weak after data released by the Labor Department showed a modest increase in U.S. consumer prices in the month of August. The Labor Department said its consumer price index rose by 0.2% in August, matching the increase seen in July. Economists had expected prices to climb by 0.3%.

The lower than expected increase in inflation may prompt the Fed to stop with just one more rate hike this year, which means, there is a possibility that there won't be a rate hike in December.

However, the dollar subsequently recovered some lost ground and the yellow metal pared its gains.

Gold futures for December ended down $2.70, or 0.2%, at $1,208.20 an ounce. On Wednesday, gold futures gained $8.70, or 0.7%, a they settled at $1,210.90 an ounce, the best settlement price in two weeks.

Silver futures for December settled at $14.244 an ounce, down $0.049 from previous close.

Copper futures for December ended up $0.0070, at $2.6830 per pound.

According to reports, the U.S. is in the early stages of proposing a new round of trade talks with China in the near future. The U.S. Treasury Secretary Steven Mnuchin has reportedly sent an invitation for talks to senior Chinese officials, proposing a meeting in the next few weeks.

The Bank of England and the European Central Bank announced their monetary policies today. The Bank of England's Monetary Policy Committee, led by Governor Mark Carney, voted to keep the key rate unchanged at 0.75% and to maintain the quantitative easing through asset purchases at GBP 435 billion. The MPC reiterated that any future increases in Bank Rate were likely to be at a gradual pace and to a limited extent.

The European Central Bank too kept its interest rates unchanged. The bank has maintained the forward guidance on monetary stimulus for a second policy session in a row. The main refi rate is currently at a record low zero percent and the deposit rate at -0.40%. The marginal lending facility rate is 0.25%.

The ECB has trimmed its economic growth outlook for this year and next. Speaking at a post-policy press conference, ECB President Mario Draghi said global risk factors have become more of a threat in recent months.

"Uncertainties relating to rising protectionism, vulnerabilities in emerging markets, and financial market volatility have gained more prominence recently," Draghi said.