Gold futures rallied to a one-week high on Thursday, as investors awaited the release of key U.S. data later in the session for further indications on the strength of the economy and the future course of monetary policy.

On the Comex division of the New York Mercantile Exchange, gold for December delivery rose 0.79%, or $10.10, to trade at $1,293.50 a troy ounce during European morning hours.

Prices hit a daily high of $1,294.20 an ounce earlier, the most since August 20.

A day earlier, gold dipped 0.14%, or $1.80, to settle at $1,283.40 as selling pressure from bullish U.S. equities offset support from ongoing geopolitical tensions in Ukraine and Iraq.

Prices were likely to find support at $1,273.40, the low from August 21 and resistance at $1,299.30, the high from August 20.

The U.S. will release data on second quarter gross domestic product, as well as reports on pending home sales and initial jobless claims on Thursday.

Data released earlier in the week showed that U.S. consumer confidence hit its highest level since 2007 in August while durable goods orders posted their biggest gain on record in July.

The upbeat data underlined optimism over the health of the economy and fuelled expectations that the Federal Reserve will begin to raise rates sooner than previously thought.

The U.S. dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, fell 0.14% to hit 82.36.

Dollar weakness usually benefits gold, as it boosts the metal's appeal as an alternative asset and makes dollar-priced commodities cheaper for holders of other currencies.

The euro rebounded from an 11-month low against the U.S. dollar as investors reassessed expectations for fresh easing measures by the European Central Bank.

According to reports, the ECB is unlikely to take new policy action at its meeting next week unless inflation data on Friday shows the euro zone sinking further towards deflation.

Also on the Comex, silver for December delivery surged 2.12%, or 41.3 cents, to trade at $19.88 a troy ounce.

Elsewhere in metals trading, copper for December delivery shed 0.04%, or 0.1 cents, to trade at $3.197 a pound.

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