On Wednesday, gold reversed early gains in thin trade after being pressured by a firmer dollar at expense of the euro. This was after investors had no choice but to watch the eurozone nations struggling to contain the region's two-year-old debt crisis.
The dollar index .DXY gained 0.4 percent while the euro edged down 0.4 percent against the greenback.
"There is a lot of worry about markets turning very distressed, meanwhile people wonder if that will bring more central bank actions as economic forecasts get more and more dire," said a Singapore-based trader.
The prospect of easing monetary policy in Europe and other key economies around the world could potentially support the sentiment in gold, as rising inflation down the road makes gold's appeal as a good inflation hedge stronger.
A Reuters poll showed that economists expect the European Central Bank will cut interest rates next week and throw more funding lifelines to stressed banks toiling against the euro zone debt crisis.
Spot gold rose as much as 0.7 percent to a more than one week high of $1,726 while theU.S. gold lost 0.4 percent to $1,707.