Gold was a touch firmer on Wednesday, trading above $925 as investor demand for a safe-haven asset spurted in the face of a weaker dollar.
Data released on Tuesday showed an unexpected fall in U.S. housing starts to record lows in April, burnishing bullion's appeal as a store of value.
While the overall health of the economy will stay in focus, the dollar's direction is expected to remain the decisive factor as the traditional negative correlation between the U.S. currency and gold comes more sharply into play.
Gold was at $926.50 an ounce by 0458 GMT (12:58 a.m. EDT), up 0.2 percent from its notional settlement of $924.65.
"Gold's generally still on a gradual uptrend and if we can retest and move above the previous high of about $933, then gold should continue to head higher," said Adrian Koh, an analyst at Singapore's Phillip Futures.
The precious metal rose to $933.50 on Monday.
"I'm still negative on the dollar as it should continue to head lower in the longer term ... that in turn should support gold higher," Koh said.
The dollar fell against the yen on Wednesday, although it inched up a touch against the euro after losing ground the previous day.
The dollar fell 0.4 percent to 95.57 yen, slipping toward a two-month low of 94.55 set earlier in the week.
U.S. gold futures for June delivery were at $926.60, down 0.01 percent from Tuesday's settlement on the COMEX division of the New York Mercantile Exchange.
Bullion is currently down about 8 percent from an 11-month high over $1,000 marked in February, when risk-averse investors flocked to the precious metal.
Since then, tentative signs that the economy may be over its worst have emboldened investors to seek riskier assets.
This is underscored by the flow of funds into gold-backed exchange traded funds (ETFs), which have recently stalled.
The SPDR Gold Trust, the world's largest, said holdings stood at 1,105.62 tonnes as of May 19, unchanged since May 13, and down about 2 percent from a record marked in April 9.
Gold has been divided between the soft dollar and firmer equities in recent weeks.
