Gold clawed back to near $1,200 per ounce on Tuesday on light physical buying, but further gains were capped by investor caution ahead of the U.S. corporate earnings season and firmness in the dollar.
Holdings by the world's largest gold-backed exchange-traded fund, SPDR Gold Trust (GLD.P), rose for the first time since late June, but the minor volume increase suggested there would be no imminent return by investors, analysts said.
Spot gold inched up $4.10 to $1,198.95 an ounce by 0511 GMT (1:11 a.m. EDT). It earlier popped briefly above $1,200.
Inflows of investor money have come down substantially, said Naomi Suzuki, a senior economist at Sumitomo Shojji Research Institute.
There's some physical buying detected. But that's in individual countries rather than across the region, she said.
Technically, spot gold is neutral. Last week the market confirmed firm resistance below the 50-day moving average, which on Tuesday stood at around $1,218.
On Friday spot gold hit a one-week high around $1,213 an ounce, still well below a lifetime high of $1,264.90 struck in late June.
U.S. gold futures for August delivery were steady at $1,199.40 an ounce. On Monday, the contract dropped $11.10 to close at $1,198.70.
The euro was little changed and well below two-month peaks against the dollar, as investors hesitated to go long on the single currency and risk large short U.S. dollar positions during the U.S. earnings season.
Investors are also watching the euro ahead of Greece's planned return to capital markets later in the day.
The debt-laden country plans to auction six-month Treasury bills on Tuesday, its first sortie into debt markets since it secured the bailout in early May.
The results of stress tests on European banks, which are due later in the month, will also be closely watched by the market as a gauge of confidence in the sector.
Gold prices hit record highs in late June as concern over European sovereign debt levels and instability in the broader financial markets helped a boom in safe-haven investment.
SPDR Gold Trust (GLD.P) said its holdings rose to 1,314.819 tonnes as of Monday, up 0.304 tonnes from the previous business day. That marked the first rise since holdings retreated from a record 1,320.436 tonnes marked in late June.
Among other precious metals, spot platinum fell 0.5 percent to $1,504 per ounce from New York's notional close of $1,512.
(Additional reporting by Chikako Mogi; Editing by Michael Watson)