Gold traded flat on Monday, as mixed Chinese economic data and Italy's credit downgrade encouraged some appetite for the metal as a safe haven, but prices were held in check by a firmer dollar.
Analysts expected gold to remain this week within a range of $1,560 to $1,590 an ounce. With major macro economic data lacking during the week, the market is monitoring the dollar's movements and exchange-traded fund (ETF) investment flows to determine trading direction.
Spot gold was last up 0.1 percent to nearly $1,581 an ounce, having touched a two-week low of $1,560.80 after positive U.S. unemployment figures on Friday.
U.S. gold futures settled $1.10 higher at $1,578 per ounce.
"For weeks we haven't really broken out of the recent range between $1,550 and $1,590 and the longer we remain between these levels, the less interesting the market will look to investors," MKS Capital head of precious trading Afshin Nabavi said.
Gold lost one percent in the previous session after U.S. nonfarm payrolls numbers beat analysts' expectations, while unemployment dipped to a four-year low.
It remained above technical support of $1,560 on prospects the U.S. Federal Reserve will keep propping up the economy with monetary stimulus through 2013.
The Fed's loose monetary policy has helped push gold to record highs in recent years, as investors have sought a hedge against a rising inflation outlook.
(Read More: Want the Fed to Tighten? Don't Hold Your Breath)
But signs of recovery have emerged, fueling speculation the central bank would curtail its monetary stimulus sooner rather than later, sapping interest in gold.
(Read More: Paulson's Gold Fund Tumbles 18% in February)
In wider markets, the dollar was firm against the euro and other major currencies, while global equities paused after last week's rally.
Meanwhile, weak data from China and a renewed spotlight on the euro zone's problems, caused by the Fitch agency's downgrade of Italy's debt rating, curbed optimism over the health of the global economy, weighing on industrial commodities like copper and oil.
China reported over the weekend that annual industrial production for January and February combined rose 9.9 percent — the lowest level since October 2012 — while its consumer price index jumped more than expected last month.
ETF Liquidation Continues
Holdings of SPDR Gold Trust, the world's biggest gold-backed exchange-traded fund, fell 3.311 tonnes to 1,239.739 tonnes by the end of last week, the lowest level since October 2011.
SPDR Gold Trust has seen more than 111 tons of outflows this year, wiping out the total 96.25 tonnes of inflow in 2012 and reflecting investors' interest shifting away from safe havens.
"Bullion's role in an average investor portfolio is set to remain peripheral, especially if we see improving growth rates globally, with market participants chasing better returns elsewhere," VTB Capital said in a note.
Echoing the sentiment of gold ETF investors, hedge funds and money managers cut their net long positions in U.S. gold futures and options by nearly 27 percent to 39,631 contracts in the week to March 5, the lowest since July 2007, data from the Commodity Futures Trading Commission showed.
Net longs in silver dropped 47 percent on the week to 6,118 lots, the lowest in more than seven months, the data showed.
Spot silver was last trading flat at just under $29 an ounce.
Among other precious metals, spot palladium last dropped 0.7 percent to $775 an ounce, off Friday's peak at $784.50, its highest since September 2011.
China's vehicle data showed new car sales fell 13.6 in February due to the Lunar New Year holiday break, but rose 14.7 percent for January and February combined from the same period a year earlier.
China's car market favors gasoline-powered engines, which use heavy palladium loadings in their catalysts.
Platinum last traded nearly flat at $1,599 per ounce.