Gold prices were set to break their three-session winning run on Thursday, weighed down by a firmer dollar and as bullion’s outlook remains clouded by prospects of further interest rate hikes from the U.S. Federal Reserve.

Spot gold was down 0.3% at $1,831.70 per ounce, after hitting a one-week peak in the previous session. U.S. gold futures fell 0.4% to $1,838.30.

“Near-term challenges remain for gold and the other precious metal on further rate hikes,” said UBS analyst Giovanni Staunovo. “The focus of market participants remains on U.S. economic data and how it impacts the monetary policy of the Fed.”

The Institute for Supply Management survey on Wednesday showed raw materials prices increasing last month, with the rebound in prices at the factory gate suggesting inflation could remain elevated for a while.

While gold is considered a hedge against inflation, recent central bank rate hikes to bring down price pressures have weighed on appetite for the metal since it yields no interest.

U.S. central bank officials were divided on Wednesday over whether recent high inflation data and a continually hot jobs market will require even more restrictive interest rates, or just patience in maintaining tight monetary policy for a longer period of time.

Investors will be watching U.S. weekly initial jobless claims data due at 1330 GMT.

Further weighing on bullion, benchmark U.S. 10-year Treasury yields scaled their highest level since early November 2022, while the U.S. dollar gained 0.3%.