"The U.S. data out that seems to have weakened the dollar and that gave gold a bit of a boost," Societe Generale analyst Robin Bhar said.
"We will have to see how it performs above $1,200 in the next few hours and if don't get a lot of follow through then prices will come back down again."
The U.S. currency had been strengthening on expectations the U.S. Federal Reserve will soon raise interest rates from record lows.
Read MoreMyth or reality? Greece's debt saga festers
Higher rates would reduce demand for non-interest-paying bullion.
Boston Fed President Eric Rosengren said Monday that he would like to begin raising rates as soon as possible, but risks from the slowdown in China and Europe in particular loom large even as growth at home is still not strong enough.
Investors were monitoring the Greek situation, after Athens missed a self-imposed Sunday deadline for reaching an agreement with its lenders to unlock aid.
Without a deal, Greece risks default or bankruptcy in weeks, a possibility that has supported gold prices to an extent. Athens missed a self-imposed Sunday deadline for reaching an agreement to unlock aid, sources close to the talks said.
"Greece and global equity markets remain the perennial wild cards," INTL FCStone said in a note.
Any worsening of the Greek debt crisis could potentially trigger demand for gold coins and bars. The metal is usually seen as a hedge against political and financial risk, although the impact on demand from wider political concerns is usually short lived.