Gold fought to hold steady above a key technical level on Wednesday, after snapping a four-day slide in the previous session on hopes the US Federal Reserve would opt to continue with monetary stimulus.
The central bank is expected to confirm in a statement at 1915 GMT that it will keep up US$85bn in monthly bond buying until unemployment rates drop significantly, although officials have shown concern over side effects from such measures.
Investors are also waiting for nonfarm payrolls data on Friday for a close look at the US labour market. Economists surveyed by Reuters expect steady hiring from employers in January, helping unemployment to stand unchanged from a month earlier at 7.8 percent.
Recent data showing signs of a steady economic recovery has depressed sentiment towards gold, a safe haven popular in times of economic and political distress.
"In the short term, gold will struggle because the US data will continue to be pretty good," said Jeremy Friesen, commodity strategist at Societe Generale in Hong Kong.
But he added that the global inflation outlook is firming due to ultra-loose monetary policies adopted by central banks in key economies, which will benefit gold as an inflation hedge.
"Growth looks better so the market is shifting out of risky low-yield asset or zero-yield assets to equities, but inflation concerns are opposing that and may be sustaining some interest in gold."
Rising oil prices may also stoke worries about inflation. Benchmark Brent crude matched a more than three-month high hit the session before.
Spot gold had edged up 0.2 percent to US$1,666.44 an ounce by 0619 GMT. It rose above the key 200-day moving average in the previous session, which stood just below US$1,663.
US gold was up 0.3 percent at US$1,666. Reuters market analyst Wang Tao said that technical analysis suggested spot gold may hover around US$1,662 an ounce for one session or retrace moderately before climbing again towards US$1,669.
Purchases in Asia's physical market were slow, as buyers that beefed up their inventories earlier in the month moved to the sidelines, waiting for clear direction in prices.
"We see some buying from Shanghai, but overall the volume is small," said Peter Fung, head of dealing at Wing Fung Precious Metals in Hong Kong. "There is no direction and gold will remain in a range between US$1,620 and US$1,700."
A recent rise in US Treasury yields helped weigh on gold sentiment as investors unwind their safe-haven buying, Fung added.
In other metals, spot platinum rose 0.4 percent to US$1,682.24, headed for a second straight session of gains, shrugging off news that Anglo American Platinum, the world's top platinum producer, has delayed job cuts to allow time for talks with the South African government and unions.
Spot silver was flat at US$31.38.
India's silver jewellery exports are expected to jump up to 30 percent this year as world demand picks up, said India's Gems and Jewellery Export Promotion Council.