SINGAPORE: Gold hovered near $1,660 an ounce on Thursday, supported by a steady euro on easing fears about the euro zone debt crisis, though investors remained cautious on the outlook for peripheral economies and were awaiting more clues on global growth.
Traders saw gold in a consolidation phase after a recent rally lifted prices from a near three-month low just above $1,610, amid speculation of more easing from the US central bank.
A slightly stronger euro provided some support, after fears about Spain's debt problem somewhat eased on ECB Executive Board member Benoit Coeure's comments on potential bond buying.
"The comment has stabilised the stock market and euro, but the prospect in the euro zone still looks grim with yields in Spain and Italy trading at relatively high levels," said Peter Tse, director at ScotiaMocatta in Hong Kong.
Tse said even if another risk sell-off took place on the deteriorating euro zone situation, gold should be able to weather the storm much better than other commodities due to its safe-haven status.
Spot gold traded nearly flat at $1,657.69 an ounce by 0541 GMT, standing above the 20-day moving average at $1,655.57.
US gold barely moved from the previous close at $1,659.
Technical signals are mixed for spot gold, as bullion prices move sideways in a resistance zone of $1,660-$1,666 per ounce, said Reuters market analyst Wang Tao.
Investors will be watching a key auction of three-year Italian bonds, the weekly US unemployment claims data, US March producers prices figures later in the day, as well as China economic growth data due on Friday, seeking clues on the global economy.
A surprise could prompt gold to break the range-bound pattern, which has suppressed interest in trading.
"A lot of people are on the sidelines right now and don't want to have an opinion at all," said a Singapore-based trader.
He added that the physical market was calm, with the world's top consumer India yet to pick up material after jewellers ended a three-week strike.
"India's imports are rather soft, as the weak rupee and high gold prices seem to be keeping demand at bay."
China, the world's second-largest gold consumer, imported 20 percent more gold from Hong Kong in February compared to a month earlier, suggesting robust appetite for the precious metal.
Car sales in China climbed a modest 4.5 percent in March from a year earlier, pulling back sharply from a hefty gain in February, disappointing platinum group metals, especially palladium which is widely used in gasoline-powered engines produced in China.
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