Gold was little changed on Thursday as traders adjusted positions following gains this week, with precious metals in general supported by lingering security concerns and strength in energy prices.
Japanese gold futures edged up, but traders were reluctant to take large new positions ahead of monetary policy meetings by the Bank of England and European Central Bank later in the day.
People don't want to trade heavily ahead of the ECB meeting and U.S. payroll data. Gold will stay rangebound until we confirm the outcome of these events, said Tatsuo Kageyama, analyst at Kanetsu Asset Management.
As of 0422 GMT, spot gold was little changed at $654.20/655.00 an ounce, from $654.40/655.20 in late European trade on Wednesday.
Activity was thin, with U.S. markets closed the previous day for the Independence Day holiday.
Kageyama said the dollar's slight falls against European currencies, stability in U.S. Treasury yields and strength in share prices were all positive for gold.
Investors were also reluctant to sell gold heavily after the suspected al Qaeda plot to detonate car bombs in London and Glasgow, traders said.
There are a lot of bullish factors, but gold needs to break through $665 to say that sentiment has reversed completely to bullish, Kageyama said.
Cash gold will face some resistance at the 100-day moving average of around $664.
Gold was last above $665 on June 7 before it fell to a three-month low of $638.90 last week.
Traders said end-users were still keen to buy physical gold at below $650.
I think it would be tough to sell heavily below $650 as we've seen a lot of interest from end-users, said Hiroyuki Kikukawa, associate director at Nihon Unicom Inc.
Benchmark Tokyo Commodity Exchange gold futures for June 2008 delivery rose about 0.4 percent.
Solid oil prices and a weaker dollar supported gold and other precious metals.
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.
U.S. crude futures were little changed on Thursday after a session of muted holiday trade, with dealers content to linger near a 10-month high ahead of data expected to show only a small build in weekly fuel stocks.
NYMEX crude for August delivery, which did not set an official closing price on Wednesday as the trading floor was shut, slipped 4 cents from Tuesday's close to $71.37 a barrel.
London Brent crude eased to $73.05 a barrel after touching a new 10-month high of $73.12 on Wednesday.
Platinum rose to $1,285/1,290 an ounce from $1,282.50/1,286 in Europe, reflecting the strength in TOCOM futures prices.
June TOCOM platinum was up 0.6 percent from Wednesday.