Gold inched up as the euro strengthened against the US dollar and oil rebounded, with investors also keeping an eye on the stock market amid gears of a growing recession.
Markets also digested news that US lawmakers had reached a tentative deal to bail out automakers. Analysts said this would boost market confidence and stocks, and could be supportive of gold.
Gold was trading at $US776.35 an ounce, up $US0.85 from New York's notional close on Tuesday, when it moved in a volatile $US17 an ounce range.
A sell-off in equities had forced investors to ditch gold to cover losses, sending bullion to a 13-month low around $US680 an ounce late in October.
A firmer euro against the dollar helped lift gold but demand from jewellers had subsided, said Ronald Leung, director of Lee Cheong Gold Dealers in Hong Kong, adding that dealers also expected book squaring as the year-end approached.
"Sentiment is neither bullish nor bearish. Fears of a recession make it bearish but I think safe-haven buying also makes it bullish," he said.
Gold is struggling to sustain an uptrend since hitting a two-month high of $US931 in early October, mainly due to weakness in oil and equities. Bullion was 25% below a lifetime high of $US1,030.80 struck in March, when fears of rising energy costs spurred buying.
"There's bargain hunting in Japan because OPEC will cut production next week. So we also see short-covering in the crude oil market," said Kazuhito Saito of Interes Capital Management in Tokyo.
Oil rebounded by more than $US1 a barrel to under $US44 in light bargain hunting on Wednesday, after slumping 4% overnight on the back of lowered forecasts for US energy demand and fears of a deepening global recession.
OPEC, facing a slide in oil prices since July of over $US100 a barrel, has already agreed to cut about 2 million barrels per day of output to support prices and members are leaning towards more supply cuts at the Dec. 17 meeting in Algeria.
The euro firmed to $US1.2949. Investors were wary of taking on risk as Washington stepped closer to bailing out its top three automakers.
The Nikkei gained 1.1% on a softer yen, with investors also taking some comfort in machinery orders data that some said was not as bad as they had feared.
The White House and congressional Democrats reached an agreement in principle on a proposal for bailing out US automakers, officials said, though final details still needed to be ironed out and put in writing.
Platinum, which is used in auto catalytic converters, was trading at $US815.00 an ounce, up $US11.50 from New York notional close, benefiting from the tentative bailout deal.
New York gold futures added $US3.0 an ounce to $US777.2 in electronic trade.
