Gold rose on Thursday as European and U.S. stock markets retreated, though it pared gains after data showing a tightening jobs market and accelerating inflation lifted the dollar and pulled U.S. bond yields from earlier lows.
The metal is consolidating after sliding to its lowest in eight weeks on Tuesday at $1,213.81, analysts said.
Spot gold rose 0.40 percent to $1,223.51 per ounce, following eight sessions in which prices have been flat or fallen.
"It looks like gold is following stocks and the U.S. dollar, but overall I would say it may have found a bottom, at least for the time being," Afshin Nabavi, head of trading at MKS in Switzerland said. "All we need is some good physical demand."
Some physical buying has come through of late, he said, but not as much as would have been expected given the price drop.
"Premiums have been rather poor," he said.
U.S. gold futures for June delivery also gained $5.30 to settle at $1,224.20 an ounce.