Spot gold was up over $3/oz by early afternoon trade today but remained at the upper end of a range ahead of US consumer price data and continued speculation that the Chinese Central Bank may buy gold to diversify its reserves.

Modest two-way interest has been seen this morning but for the moment gold should continue its theme of consolidation around $613/oz $628/oz with a bias to the upside amidst growing speculation of CB (central bank) diversification away from the dollar," said the TheBullionDesk.com’s James Moore in a note.

Recent producer inflation levels in the US, that were lower than the market expected, hinted at a potential halt to rate hikes in future, however Federal Bank meeting minutes do indicate a more hawkish position, according to Nedbank Treasury.

"Gold prices came under pressure yesterday as the minutes of the last FOMC meeting suggested a much more hawkish Fed than had been anticipated," said the bank.

The price of oil, which has an effect on the gold price because of its global inflation influence, was also up slightly yesterday as inventory levels were shown to be down.

In afternoon trade, gold was trading at $625,80/oz, up $3,10 on yesterday’s close of $622,70/oz.

The dollar was trading at $1,2804 against the euro, from a previous close of $1,2827.