Gold slipped below $1,650 an ounce in thin trading on Wednesday, tracking a decline in stock markets, as investors hugged the sidelines ahead of a G20 meeting later this week which is expected to give clues on currency policy.
China's week-long Lunar New Year holiday also curbed trade.
Gold suffered technical selling pressure this week, with prices sliding to their lowest in more than a month at $1,638.82 after breaching a succession of support levels.
Spot gold eased 0.2 percent to $1,647.80 an ounce by 1033 GMT, recovering from the previous session's one-month low of $1,638.82. U.S. gold futures for April delivery eased 0.1 percent to $1,647.30 an ounce.
Traders are confident that chart support above $1,630 an ounce will keep losses in check.
"Prices are holding well around the $1,640s area... it looks like every time you get close to the bottom of the range there are some buyers around," MKS' head of trading Afshin Nabavi said. "We should hold the $1,635 level on the downside."
"The market is looking at anything for direction for the time being and players are awaiting the G20 at the end of the week as something that could provide it," he said.
G20 finance ministers and central bank governors are set to meet in Moscow on Friday, with negotiations around competitive currency policies likely to dominate.
The Group of Seven rich nations tried this week to cool growing tension over exchange rates sparked by weakness in the Japanese yen, but markets found the effort lacking in clarity.
European shares fell 0.3 percent on Wednesday after mixed corporate results, although the euro firmed against the dollar after better-than-expected euro zone industrial output data.
Gold has tended to track stock markets for much of the last year, benefiting from a sharper appetite for assets seen as higher risk, but the relationship is fluid.
"Support from both the investor and spec community is needed in order for gold to stage a convincing recovery from here," UBS said in a note. "But the lack of urgent fundamental motivation makes it difficult for gold market participants to muster enough conviction."
"After some support around $1,639, the next technical target is $1,625," it said. "We'd expect revitalised interest there."
China still absent
Gold lacked physical support as China's markets remained closed for the Lunar New Year holiday.
"Given China is on holiday this week to celebrate the Lunar New Year, physical gold demand on the Shanghai(Gold) Exchange is expected to slow down after a year-on-year jump of 10 percent in January and February,"Sharps Pixley said in a note.
The platinum group metals continued to outperform gold and silver, with palladium hitting repeated multi-month highs on concerns over supply and signs the global economy is recovering.
Spot palladium rose to $775 an ounce, its strongest since 5 September 2011, and was later at $770.47, up 0.2 percent. Platinum gained 0.3 percent to $1,718.49, still within sight of a 17-month peak struck last week.
With a 12-percent gain, platinum is the best performer this year so far, compared to a 10-percent increase for palladium and a 1.8-percent fall in gold.
News that Zimbabwe's government would reclaim nearly 28,000 hectares of land from Implats' subsidiaryZimplats, renewed supply worries for platinum-group metals (PGMs). Zimbabwe's annual platinum output is under 300,000 ounces.
"While PGM production from Zimbabwe pales in comparison to South Africa, it nonetheless reflects the tensions PGM miners face operating in the Southern African region," HSBC analyst James Steel said in a report.
"This may lead to tighter supply and demand balances for the PGMs and is positive for prices," Steel's report said.
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