Spot gold was up 0.2 percent at $1,308.66 per ounce, as of 0806 GMT. US gold futures were down 0.2 percent at $1,311.80.
US consumer prices were unchanged for a third straight month in January, leading to the smallest annual increase in inflation in more than 1-1/2 years, which could allow the Federal Reserve to hold interest rates steady for a while.
"If you look more broadly, the Fed is unlikely to raise rates in an environment where inflation is still low," said Ilya Spivak, a senior currency strategist at DailyFX.
Gold prices have risen nearly 13 percent since touching more than 1-1/2-year lows in mid-August, mostly on expectations of a pause in interest rate hikes and tumultuous stock markets.
"A strong dollar is pressuring gold prices and physical buying is also limited," said Peter Fung, head of dealing at Wing Fung Precious Metals in Hong Kong.
With gold unable to break higher, outflows rose in holdings of SPDR Gold Trust, the world's largest gold-backed ETF. Holdings have fallen over 3 percent so far this month.