Gold held steady around $US925 per ounce on Thursday as a recovery in the US dollar dented sentiment, pushing prices below a six-week high touched the previous day on buying by gold-backed exchange-traded funds.
Despite US and euro zone data suggesting recent optimism about a global economic recovery may have been premature, gold struggled to extend gains as current prices were already seen as high, traders said.
"Gold prices have been stabilising at relatively high levels, slowing fresh investment," said a senior trader at a Japanese smelter.
"For gold prices to break above recent ranges, there has to be some fresh news about economic turmoil," he said.
But gains in other commodities such as oil and base metals in recent weeks suggest gold will remain supported, keeping prices in the $US915 to $US930 range for now, the senior trader said.
Spot gold held steady at $US925.40 per ounce, little changed from New York's notional close of $US925.45.
It fell 0.4% to a low of $US922.20 earlier on Thursday.
On Wednesday, gold rose to a six-week high of $US930.40 an ounce as buying by exchange-traded funds and losses in stock markets boosted interest in the metal.
The world's largest gold-backed exchange-traded fund, the SPDR Gold Trust, said holdings had risen to 1105.62 tonnes as of May 13, up 1.53 tonnes from the previous business day for the first gain in a month.
The holdings began declining after hitting a record high on April 9 as a rise in share
prices has lessened bullion's appeal.
US gold futures for June delivery were little changed at $US926.30 per ounce, compared with Wednesday's settlement of $US925.90 on the COMEX division of the New York
Mercantile Exchange.
The US dollar kept gains on Thursday against the yen and euro after rallying broadly the day before as an unexpected decline in April's US retail sales raised concerns about the state of the economy and rekindled demand for the greenback as a safe haven.
Gold becomes more expensive for holders of other currencies as the US currency strengthens.
