A highly anticipated U.S. inflation report, which may shed some light on the Federal Reserve's cautious stance on interest rates, caused the dollar and Treasury yields to fall on Thursday, sending gold prices to the highest level in two weeks.

Spot gold advanced by 0.3% to $1,879.25 per ounce while U.S. gold futures added 0.3% to $1,892.30 per ounce.

As a result of the dollar index and U.S. Treasury yields being anchored near two-week lows, gold that doesn't pay interest is more appealing.

The Federal Reserve adopted a more cautious attitude last month, as evidenced by the minutes of its September meeting, which were confirmed by senior Fed officials in a string of pronouncements this week.

The potential cost of owning non-yielding bullion, which is still down over 9% from nearly record highs reached in May, increases with high interest rates. A rate increase at the Fed's December meeting is still expected by investors to be 26% likely.