Spot gold was little changed at $1,717.30 per ounce, as of 0852 GMT, after rising nearly 1% in the previous session. U.S. gold futures edged 0.1% higher to $1,728.60.
"If the ECB only raises rates by 50 basis points as some are suggesting, then that could be mildly bearish for gold in the short term as it would probably prop up the dollar," StoneX analyst Rhona O'Connell said.
However, "there has been some short-covering in the professional market, stemming from the comparative stability around $1,700 over the past few days," she added.
The dollar index held steady near a 20-year high hit in the previous session, making gold more expensive for buyers holding other currencies. [USD/]
Investors are expecting the ECB to go for a hefty rate hike to combat soaring inflation. The policy decision is due at 1215 GMT.
Focus also remains on Fed Chair Jerome Powell's speech at a conference later in the day. Fed officials said on Wednesday they still were not convinced that the worst of the U.S. inflation scare had passed, signalling a continuation of aggressive rate hikes.
Bullion is usually considered a hedge against inflation, but it tends to come under pressure in a high interest rate environment as it yields no interest.
"A lot of eyes are glued to what Powell will say tonight and whether there's any view on what the Fed will do at the end of the month," said Brian Lan, managing director at Singapore-based dealer GoldSilver Central.
Elsewhere, spot silver rose 0.1% to $18.5252 per ounce, platinum climbed 0.4% to $869.60, and palladium gained 0.3% to $2,049.24.
(Reporting by Arundhati Sarkar and Eileen Soreng in Bengaluru; Editing by Subhranshu Sahu)
By Arundhati Sarkar
