Gold edged higher on Wednesday to trade just above a key level of $650 an ounce, but business was very low key because of a holiday in the United States.
Spot gold was quoted at $654.40/655.20 an ounce as of 1429 GMT, compared with $652.70/653.50 in New York late on Tuesday and last week's three-month low of $638.90.
U.S. markets were closed for Independence Day and will re-open for business on Thursday.
After a brief rally during the past few days, gold prices have consolidated partly because there is little buying coming through in the third quarter, said Michael Widmer, director of research at Calyon Corporate and Investment Bank.
Traders said security worries, triggered by the suspected al Qaeda plot to detonate car bombs in London and Glasgow, which had supported gold prices earlier this week, seemed to fade, but oil prices and the dollar might support gold prices this week.
Sterling jumped to a 26-year high versus the dollar for a third day and the broadly weak U.S. currency was also stuck at near record lows against the euro.
A weaker dollar makes gold cheaper for holders of other currencies and lifts bullion demand. The metal is also often seen as a hedge against oil-led inflation.
Oil prices edged down from a 10 month-high above $73 a barrel, though analysts expected the rally to resume due to low U.S. fuel inventories and expectations of strong gasoline demand.
Europe's central banks sold more gold in the week ended June 29, although the drop of 7.1 billion euros was mainly due to a quarterly revaluation, the European Central Bank said.
In the physical market, security fears had done little to spur gold buying in Asia, but the electronics sector in Japan showed a steady interest in the metal.
Other metals were little changed, with platinum rising to $1,282.50/1,286 an ounce from $1,280/1,284 in the U.S. market. Silver was at $12.62/12.67 an ounce, up from $12.56/12.61. Palladium was flat at $364/369.