Gold inched higher on Thursday, recouping some earlier losses in line with a firmer euro and bouts of physical buying in some parts of Asia, although signs the U.S. economy is on a better footing were however curbing further gains.
Spot gold was last up 0.2 percent to $1,591 an ounce. U.S. gold futures settled $2.30 higher at $1,590.7 per ounce.
(Read More: Gold Rises, Yet Traders Can't Agree on Its Next Move)
The metal hit a two-week high of $1,599.10 in the previous session on continued concerns about the euro zone, but failed in its attempt to break above $1,600, due to pressures from the dollar and persistent redemptions in gold-backed exchange-traded funds. It later closed at $1,587.29.
"Gold has reversed earlier losses at the same time as the euro did, helped by technical buying and physical demand," HSBC analyst Howard Wen said.
The euro recovered from an earlier three-month low against the U.S. dollar, which remained however close to its highest level in over seven months against a basket of other currencies after more improving signs of a labour market recovery underpinned sentiment the U.S. economy is gaining traction.
In wider markets, global equity markets rose, with the Dow Jones index set to extend its winning streak to 10 days.
Physical buying was seen in some parts of Asia, including China and Thailand, traders said.
"We are seeing very active demand from traders out of Asia, who import gold in countries like Thailand and China," MKS Capital senior vice president Bernard Sin said.
According to analysts who map the performance of the metal against historical charts the metal was seen finding strong support in the $1,575 area, with resistance pegged at $1,600.
"A breakout on either side could see gold rally as option traders hedge their positions," broker Standard Bank said.
SPDR Holdings Little Changed
Reflecting a lack of conviction in the gold market, holdings of the largest gold-backed exchange-traded-fund, New York's SPDR Gold Trust were little changed on Tuesday from Monday, while those of the largest silver-backed ETF, New York's iShares Silver Trust SLV rose half a percent.
The next major event is U.S. consumer inflation data on Friday, which is likely to provide some direction, analysts said.
Investors will be also watching a policy meeting of the Federal Reserve on March 19-20 to gauge the central bank's attitude towards monetary stimulus.
An exit from the stimulus policy would deal a heavy blow to gold, which has thrived on demand from investors who buy gold to hedge against the inflationary risks of loose monetary policies.
Among other precious metals, spot silver was down 0.9 percent to $28.62 an ounce, having hit a two-week high of $29.35 on Tuesday.
Spot platinum last fell 0.2 percent to about $1,586. Palladium last dropped 0.6 percent to $767 per ounce.
The current weakness in the platinum price, which fell again to a discount to the value of gold, is also seen reflecting expectations of lower German car sales.
The European car market favors diesel-powered engines, which use heavy platinum loadings in their catalysts.
South Africa PGMs output rose by 1.9 percent in volume terms in January, compared to the previous year. The country's gold supply fell 8.1 percent.