Gold prices rose again on Wednesday morning, extending the 17-week high to $1,345.55.
Spot metal was last still near this level at $1,341.10/1,341.90 per ounce, up 30 cents on Tuesday's close
"Gold continues to perform well as it erodes overhead supply; it is not racing higher but climbing in a steady pattern and pull-backs have so far been short-lived and limited," FastMarkets analyst William Adams said.
The metal is up more than 12 percent since the start of the year, with much of that strength from a reversal of fortunes in the exchange-traded fund (ETF) sector, Commerzbank said.
"Yesterday saw inflows into the gold ETFs for already the fourth consecutive day of trading. Thus the headwind from this side is clearly abating further, which likewise points to at least stable and possibly even higher gold prices," it said.
Holdings in the ETFs followed by FastMarkets rose 4.23 tonnes on Tuesday to stand at 1,737.93 tonnes, the highest in a week. If this trend continues, holdings could post their first monthly rise since December 2012.
But robust demand for physical gold in China - which overtook India as the largest consuming nation last year - has also played a major role in the metal's recovery, Commerzbank added.
China imported 90 tonnes of gold net from Hong Kong last month, according to the Census and Statistics Department of the Hong Kong government.
On the currency markets, the dollar nudged lower against the euro to 1.375, while the yuan continues its virtual freefall against the US currency on speculation that the Chinese government may double the allowed trading range of its currency. The yuan dropped to the lowest since July against the dollar earlier at 6.133 and was last at 6.125.
In equities, the FTSE 100, the Dax and the Nikkei were all lower, while the Hang Seng posted modest gains.
In data released so far, the February German GfK consumer climate number at 8.5 was 0.2 points higher than expected. January US new home sales - forecast at 406,000 - and the weekly US crude oil inventories number are due later.
There are growing concerns that the US economic recovery is faltering - doubts are emerging that the recent run of forecast-missing US data was solely attributable to harsh winter weather conditions, which is putting pressure on the greenback ahead of fresh numbers next month.
The rest of the precious metals remain rather subdued. The platinum price edged $1 lower to $1,436/1,441 per ounce and palladium declined $3 to $732/738 but the silver price was last six cents higher at $21.89/21.94.
