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Gold bounced off a one-week low hit earlier on Thursday as a dip in U.S. Treasury yields bolstered the metal's appeal as an inflation hedge.

Spot gold was up 0.5% to $1,824.89 per ounce by 2:14 p.m. EDT (1814 GMT), recovering from its lowest level since May 6 at $1,808.44.

U.S. gold futures settled 0.1% higher at $1,824.

"All the inflation numbers are positively affecting gold prices and the momentum is likely to continue going forward," said Jeffrey Sica, founder of Circle Squared Alternative Investments.

Data showed fewer Americans filed new claims for unemployment benefits last week. Meanwhile, producer prices increased more than expected in April.

This followed Wednesday's data showing U.S. consumer prices jumped the most in nearly 12 years last month, which intensified concerns over rising inflation and possible interest rate hikes.

However, the Federal Reserve has pledged to keep rates low until the economy reaches full employment and inflation hits 2% and is on track to "moderately" exceed that level for some time.

"Dips in gold remain a buying opportunity," said David Meger, director of metals trading at High Ridge Futures.

"We're in a fundamentally strong underlying condition of going through recovery in the economy along with a very low interest rate environment that creates inflationary pressures in the market."

Meanwhile benchmark U.S. 10-year Treasury yields eased after four straight days of gains.

Gold is considered a hedge against potential inflation triggered by widespread stimulus, although elevated Treasury yields have dulled non-yielding bullion's appeal this year.

Investors are now awaiting U.S. retail sales data on Friday.

Elsewhere, palladium rose 0.1% to $2,859.13 per ounce, having hit a three-week low after the world's largest producer of the metal, Russia's Nornickel, said it had resumed full operations at one of its two mines hit by flooding this year.

Silver was flat at $27.03 per ounce, while platinum fell 0.8% to $1,200.31.