Gold edged off the previous day's eight-week low on Wednesday as US President Trump's abrupt firing of FBI chief James Comey weighed on US stocks, though gains were capped by expectations of further interest rate increases.
European shares retreated from 21-month highs in earlier trade and the dollar initially slipped on concerns that Trump's dismissal of his FBI chief could make it harder for him to push through tax reform plans.
Spot gold was up 0.2 percent at $1,223.42 an ounce by 1405 GMT, while US gold futures for June delivery gained $7.20 to $1,223.40.
The metal has slipped sharply in the past week as concerns about this month's French elections and North Korea's nuclear programme faded, slipping to its lowest since mid-March at $1,213.81 on Tuesday.
"(This) looks like an attempt at stabilisation today after the sharp losses in the preceding days," Commerzbank analyst Carsten Fritsch said. "Trump's firing of FBI Chief Comey adds new uncertainty, (and) stock markets seem to pause."
Trump attributed his decision to sack Comey, who had been leading an investigation into the Trump campaign's possible collusion with Russia during the 2016 election, to the FBI chief's handling of an investigation into presidential nominee Hillary Clinton's emails.
Rival Democrats said that Trump had political motives for the move.
In addition to jitters over Comey's ousting, rekindled fears that North Korea could be gearing up for another weapons test fed into risk aversion in the broader markets, taking some pressure off gold.
"The unpredictability of both Trump and North Korea has been a reminder that geo-risk has not disappeared but temporarily gone into hibernation," said Saxo Bank's head of commodity research, Ole Hansen.
"Initially (the Comey sacking) has had only a limited impact but it highlights that there are other drivers out there. It can turn on a plate if one of the two escalates, especially North Korea."
Gains in gold remained muted as expectations for further US monetary policy tightening next month underpinned the dollar and weighed on bullion.
The metal is highly sensitive to rising US interest rates, which increase the opportunity cost of holding non-yielding bullion while boosting the dollar, in which it is priced.
Among other precious metals, silver was up 0.6 percent at $16.24 an ounce after sliding to its weakest since January 3 at $16.01 on Tuesday. Platinum was up 0.7 percent at $907.60 and palladium rose 0.6 percent to $801.05.
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