Rising European stocks and a falling dollar supported gold Thursday, but the yellow metal remained tethered to the previous day's closing price on light volume and even lighter risk appetite.

The gains in European stocks, reflected in the continent's three largest stock indexes gaining more than 1 percent, came after the European Central Bank loaned some $640 billion to more than 500 Eurozone banks.

The three-year loans carry a 1 percent interest rate and provide a short-term liquidity injection into Europe's cash-starved banks. The hope is that the borrowers will use some of the money to buy Spanish and Italian government bonds to keep the interest rates on those debts manageable.

The massive amount of money loaned left the markets underwhelmed.

We are seeing a little bit of short-covering and equity markets are in positive territory opening up. There is a little bit of risk appetite this morning, Niels Christensen, FX strategist at Nordea, told Reuters.

In the longer-term the liquidity provided yesterday is not going to solve the debt crisis, it is not going to help southern European countries with their problems in getting control of their public debt.

The short-covering helped raise European equities, which in turn lifted the single currency; the euro edged up to around $1.31, an 11-month low against the dollar. The greenback fell 0.14 percent against a basket of major currencies.

Because precious and base metals as well as agricultural commodities are priced in dollars a drop in the dollar's value makes such themless expensive, thus encouraging buying.

Crude oil continued its week-long rise after government reports of a big drop in inventories. Copper rose again on expectations that the U.S. recovery will boost demand for construction and electrical materials.

Gold, which closed on the Comex Wednesday at $1,613.60, fluctuated between $1,604 and $1,618.

We will probably be trapped in the range of $1,575 and $1,650 until the year-end, a Hong Kong-based dealer told Reuters. The market is still focused on the Eurozone -- if there will be new agreement, if the euro zone economy will slide next year, etc.

Futures on U.S. stocks were up modestly as investors awaited a raft of economic reports, including weekly jobless claims, consumer confidence, home prices and the final third-quarter GDP numbers.

The most actively traded gold contract on the Comex slipped 80 cents to $1,612. 80, while gold for immediate delivery fell $4.83 to $1,609.47

The most actively traded silver contract on the Comex rose 18 cents to $29.43, while silver for immediate delivery was off 14 cents to $29.42.