Gold was steady on Tuesday, weighed down by a stronger dollar but propped up by risk aversion on worries about potential failures of two major US automakers and the health of the European banking system.
Tumbling stocks worldwide on these concerns had prompted investors to sell gold on Monday to cover losses in other assets.
But gold was likely to benefit eventually as investors regard bullion as a hedge against risk, as well as against inflation.
"It's difficult to say which market forces will have a greater influence on gold's future,'' said Darren Heathcote, head of trading at Investec Australia. ``There are so many questions unanswered, such as whether the stimulus packages would be sufficient or would come in a timely manner, which leaves the market open to speculation and further volatility, unsettling investors.''
Gold was at $US916.45 per ounce in Asian trade, little changed from New York's notional close of $US916.30.
Bullion is trapped in a tight range, having recovered about 4% from a six-week low of $US882.90 hit on March 18, but 9% off the 11-month high above $US1000 set in February.
For the time being, there is very little opportunity for gold to break above $US940, but support is seen firm around $US890, Heathcote said, adding gold will likely be capped by the dollar's strength as the currency's impact has been larger recently.
A higher US currency makes gold priced in dollars more expensive for holders of other currencies.
The dollar was up 0.9% against the yen on Tuesday but down 0.3% against the euro, after gaining against major currencies the previous day on rising safe-haven flows.
Gold has held firmly above $US900 thanks to buying related to gold-backed securities.
The world's largest gold-backed exchange-traded fund, the SPDR Gold Trust, said holdings stayed unchanged at a record 1127.44 tonnes as of March 30, a level first reached on March 29.
