Gold futures have gained for the first time this week, as a brief pause in the U.S. dollar's upward march spurred some investors who had bet on lower prices for the precious metal to close out those bets.
The U.S. dollar was lower against some major trading partners early in New York's trading day, as this week's escalation in worries about Europe's sovereign-debt crisis slowed.
Some upbeat U.S. economic data and gains in European markets limited demand for the currency as a safe haven, and European leaders at a summit re-affirmed their wish for Greece to remain in the euro zone, though they didn't announce any new agreements to contain the spread of the euro-zone's crisis.
That, in turn, supported the battered gold market.
The most actively traded gold contract, for June delivery, rose $9.10, or 0.6%, to settle at $1,557.50 U.S. a troy ounce on the Comex division of the New York Mercantile Exchange.
Gold futures sold off sharply at the beginning of the week, weighed down along with the euro and global equities markets as investors worried that political gridlock in the euro zone could push Greece to leave the currency union.
The US dollar gained as investors sought a safe harbour from the potential resulting European banking crisis.
Though gold is seen by some investors as a safe haven, the metal hasn't behaved that way during the latest escalation in Europe's sovereign-debt crisis.
Investors have generally chosen the U.S. dollar, pushing the currency higher and making dollar-denominated gold futures more expensive for buyers using other currencies.
The surge in the currency has also diminished demand for precious metals as a hedge against declines in the currency.
Gold's losing streak came to an end as gold sellers pulled back after the end of floor trading on Wednesday.
"Once again, the price of gold has successfully held firm at the $1,530 U.S. a troy ounce mark," analysts with Commerzbank said in a note.
Sentiment was also boosted on Thursday by reports that world central banks continued to beef up their gold reserves in April and May.
Mexico, Kazakhstan and Ukraine were buyers last month, while the Philippines' central bank lifted its gold reserves by more than one million troy ounces in the month prior, data released Thursday by the International Monetary Fund show.
The purchases should "somewhat help sentiment for gold," said Edel Tully, an analyst with UBS.
Commerzbank analysts said they central bank buying has helped underpin gold prices, and they "anticipate increasing buying of gold if its price should fall" toward $1,500 U.S.
In other precious metals: July delivery silver closed at $28.157 U.S., up 63.8 U.S. cents; July platinum ended at $1,422.40 U.S., up $8.30 U.S.; June palladium finished the session at $587.50 U.S., down $3.60 U.S.
