Gold prices held largely steady in Asian trading on Thursday after jumping over 1% the previous session, as a slight retreat in the U.S. dollar and uncertainty surrounding the prolonged U.S. government shutdown helped underpin sentiment.

Spot gold was last up 0.2% at $3,988.79 per ounce by 00:37 ET (05:37 GMT), while U.S. Gold Futures edged up 0.1% to $3,995.70.

The yellow metal jumped 1.3% in the previous session as a global risk-off mood gripped markets amid growing fears of a stock market bubble.

Gold steadies as dollar dips; shutdown worries in focus 

The US Dollar Index slipped 0.2% in Asian trading on Thursday as investors returned to risk assets following a brief rout in technology stocks earlier in the week. Wall Street’s rebound on Wednesday helped calm fears about overextended valuations.

Still, the prolonged U.S. government shutdown, now the longest on record, has added to uncertainty in financial markets.

The suspension of several official economic data releases has left investors relying more heavily on private-sector indicators, making it harder to gauge the health of the world’s largest economy. 

At the same time, fresh data pointed to a still-resilient U.S. labor market. ADP employment data showed private payrolls rose by 42,000 in October, roughly double market expectations.

The stronger reading reduced bets that the Federal Reserve will cut interest rates in December. The outlook for higher-for-longer rates typically weighs on gold, which offers no yield.

Adding to investor caution, the U.S. Supreme Court began hearings this week on the legality of tariffs imposed under President Donald Trump. The case could have wide-ranging implications for trade policy, and markets are watching for potential long-term effects on inflation and supply chains.

"We remain positive on our gold outlook, despite the recent pullback in prices, with key supports, including central bank and safe haven demand, still in place," ING analysts said in a note.

"Although trade tensions have recently eased, significant geopolitical uncertainty persists, driving demand for safe assets," they added.

Metal markets subdued

Other precious and industrial metals also traded in tight ranges on Thursday.

Silver Futures gained 0.2% to $48.12 per ounce, while Platinum Futures were largely unchanged at $1,564.60/oz.

Benchmark Copper Futures on the London Metal Exchange edged 0.4% higher to $10,771.20 a ton, while U.S. Copper Futures rose 0.6% to $5.02 a pound.