Gold edged up on Thursday after tracking oil lower in the previous session, hovering near a four-week high on hopes the Federal Reserve will extend its bullion-friendly stimulus efforts.
Recent weak U.S. economic data suggesting the economic recovery is not yet on a firm footing has helped restore some investor faith in bullion. Gold has fallen about 20 percent this year as rallies in equities hurt its safe-haven appeal.
Gold added $6.10 an ounce to $1,337.84 an ounce by 0638 GMT. It jumped to $1,344.46 on Tuesday, its highest since September 20, after weak U.S. jobs data cemented expectations the Fed will keep its stimulus measures in place until 2014.
Investors await the release of U.S. new home sales at 1400 GMT.
"The mortgage rate has been rising since June and we know jobs data was not as good as expected in September. We want to know how these factors affect home sales," said Joyce Liu, an investment analyst at Phillip Futures.
"If sales fall well below 425,000, the Fed will more likely be in favour of postponing the tapering to next year. I am looking at a major resistance at $1,344 an ounce. If we have data that disappoints, well prices may rise again."
U.S. gold was at $1,338.50 an ounce, up $4.50.
Gold has often tracked shifting expectations as to whether the U.S. central bank would start reining in nearly five years of super-easy dollars, a measure which had sparked fears of inflation and encouraged investors to buy the precious metal.
Prices sank to a near three-year low around $1,180 in late June on worries over the Fed's plan to wind down the stimulus, and have been dampened by investment fund selling.
"What is interesting to note though, is that a dovish Fed is not changing the overall outlook for gold prices. This is because the tapering is only delayed," said ABN AMRO in a weekly report. "Sooner or later it will get back on the agenda and influence financial markets again."
Asian shares fell in volatile trade on Thursday and the dollar came under pressure as a further spike in Chinese money-market rates tempered the effect of a survey showing a pick-up in manufacturing.
In the physical market, jewellers who had chased bullion at about $1,310 an ounce disappeared, but dealers expected to sell some gold to top consumer India ahead of the Diwali festival of lights in November.
Premiums in Hong Kong were unchanged from last week at $1.50 to the spot London prices.
"Premiums in India are very high because of limited imports. I would say India is buying but not aggressively," said a dealer in Hong Kong.
A shortage of gold triggered by the government's move to curb imports and control a rising trade deficit has sent premiums in India to more than $100 an ounce over London prices this month.
Gold is an integral part of Indian culture, given as a dowry for marriages, which tend to be timed around auspicious days that are often religious festivals.