Gold rose on Thursday, benefiting from a retreat in risk appetite after soft U.S. economic data knocked stocks, the dollar and industrial commodities lower.
Spot gold was bid at $1,211.70 an ounce at 1528 GMT against $1,207.50 late in New York on Wednesday. U.S. gold futures for August delivery rose $5.40 to $1,212.40.
Stock markets weakened in Europe and the United States after a lower-than-expected reading from the Philadelphia Federal Reserve's index of business conditions in the U.S. Mid-Atlantic region pointed to sluggish U.S. growth.
Concerns over the economy tend to support gold, but the precious metal remains 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.
On the currency markets, the euro extended gains against the dollar, nearing $1.29 for the first time in two months, after data showed the Philadelphia Federal Reserve's business conditions index fell in July.
Among other commodities, oil futures fell more than $1 a barrel on Thursday as disappointing economic data pushed the stock market lower, while base metals slipped.
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 $18.29 an ounce against $18.24, rising in line with gold. Platinum was at $1,521 an ounce against $1,519.50, while palladium was at $467 against $464.50.
Platinum and palladium, which are predominantly used for the production of autocatalyts, are currently facing some pressure, said Commerzbank in a note.
The declining global demand for vehicles might have contributed to this trend. Car sales in Europe, for instance, fell by 6.2 percent in June compared to last year, it added.
The biggest growth market China also registered a slowdown of growth dynamics. In June, sales figures for cars grew at the slowest rate for 15 months.
(Editing by Alison Birrane)