Gold firmed to near a one-week high on Thursday as the euro struggled to sustain gains and shares slipped on uncertainty over the pace of economic recovery in the United States.
Japanese shares edged down on Thursday after mixed U.S. data underscored an uneven economic recovery, and a euro rally stalled below two-week highs, with most investors on the sidelines ahead of a raft of bond auctions in the euro zone area.
Bullion remains the darling of some investors. But the metal will have to crack strong resistance around $1,250 an ounce to surpass last week's record just above that level.
Nearly a week of steady holdings of bullion in the world's largest gold exchange traded fund suggest investors are waiting for cues from other markets.
Spot gold was at $1,233.25 an ounce by 0447 GMT, up $3.65 from New York's notional close on Wednesday, when it rose to its highest in a week around at $1,237.65 before speculators booked profits. Gold hit a lifetime high of $1,251.20 last week.
Even though some of the apprehension about Europe's fiscal issues and so on has faded, I believe there's still a core of investors that are concerned about that, said David Moore, commodity strategist at Commonwealth Bank of Australia in Sydney.
But I think the gold price has risen so much. At these very high levels, you're getting a lot of caution, said Moore.
U.S. gold futures for August delivery added $4.6 an ounce to $1,235.1, having also hit a one-week high on Wednesday.
Cash gold and U.S. bullion futures had rallied to record highs after investors ditched the euro and shares on fears the euro debt crisis would spread and the U.S. economy may be slowing.
A Reuters poll published on Wednesday showed a continuing divergence in the expected rate of recovery among the world's richest nations, with Europe's debt crisis continuing to hamper economies across the continent.
We expect gold to continue outperforming its peers, as the price will be supported by sovereign risk and related safe haven demand, BNP Paribas said in a report.
Silver was barely changed, while platinum edged up but was still below a four-week high hit the previous day, and sister metal palladium rose to its strongest in a month before slipping.
While gold managed a record high last week, the other three precious metals have still not managed to breach highs hit in early 2008.
I feel that platinum and palladium have been following the equity markets because of their industrial use. Some people must be liquidating their positions today because of weaker equities, said a physical dealer in Tokyo.
Oil retreated by 0.8 percent toward $77 on Thursday, slipping from its highest since early May, as the pace of demand growth was questioned following mixed economic and inventory data from top consumer the United States.
(Editing by Michael Urquhart)