Gold rose in Europe on Thursday as the dollar slipped to a two-month low against the euro, under pressure after minutes from the June Federal Reserve meeting heightened concerns over the U.S. economy.
Spot gold was bid at $1,213.20 an ounce at 1144 GMT, against $1,207.50 late in New York on Wednesday. U.S. gold futures for August delivery rose $6.60 to $1,213.60.
While the usual inverse relationship between gold and the dollar has softened in recent months as both benefited from risk aversion, weakness in the U.S. unit remains supportive of prices. However, gold remains stuck in a narrow range.
Bargain hunters want to buy it around $1,200, and (at) $1,217, profit takers are all lined up, said Afshin Nabavi, head of trading at MKS Finance.
Overall a break above $1,225 should trigger more interest from the buyers who are currently on the sidelines. On the downside, $1,200 to $1,185 should bring in some physical related buying.
The dollar weakened against the euro and a basket of six currencies .DXY on Thursday after cautious U.S. Federal Reserve minutes triggered concerns about the outlook for the U.S. economy.
Chinese data also showed the country's economic growth moderated to 10.3 percent in the second quarter from 11.9 percent in the first.
We are essentially banking on China's growth to counteract slow growth in the United States and Europe, so a slower China will get investors jittery again, said Societe Generale analyst David Wilson.
The wider markets managed to shrug off early weakness to rise in afternoon trade, with European shares moving into positive territory as investors digested strong quarterly results from JPMorgan Chase & Co (JPM.N). .EU
U.S. stock futures also rose, pointing to a higher opening on Wall Street later in the session. .N
Oil prices reversed early losses and rose toward $78 a barrel on Thursday after a bounce in equities overshadowed earlier news pointing to flatter economic growth in China.
Among other commodities, copper prices remained lower but other base metals moved into positive territory.
From a technical perspective, gold is poised to creep higher after its sharp correction from record highs at $1,264.90 an ounce in late June.
Chart support combined with re-emerging physical demand prevented the metal from falling substantially below $1,200 an ounce, and it has successfully held above that level for the last two sessions.
With daily momentum pointed higher and the market pulling away above trendline support at $1,182, we are maintaining our near-term focus higher toward $1,225/27, technical analysts at Barclays Capital said in a note.
Retracement resistance beyond $1,227 is at $1,235, and it would take a recovery above this latter level to suggest that gold is primed to post new 2010 highs, they added.
Among other precious metals, silver was bid at $18.31 an ounce against $18.24, firming in line with gold. Platinum was at $1,524.10 an ounce against $1,519.50, while palladium was at $464.10 against $464.50.
(Reporting by Jan Harvey; Editing by Alison Birrane)