Gold was little changed in Europe on Tuesday afternoon, but a retreat in the dollar allowed gold to recover its earlier losses, traders said.
Spot gold was indicated at $391.20/391.70 by 1438 GMT, from $391.90/392.40 at Monday's close in New York.
"There was some good buying coming up this afternoon with the euro climbing versus the dollar," one trader said.
"The major triggers remain the currencies and high oil prices."
Gold struggled earlier in the day as the dollar strengthened in the aftermath of better-than-expected US data the previous session.
But the greenback subsequently fell back marginally after a key US inflation gauge showed a tepid reading.
Several traders and analysts have pointed to gold's lack of performance despite heightened security fears, an uncertain economic outlook and record-high oil prices.
"The price action or, more accurately, lack of action in gold has been extremely disappointing for any one left in the market who was not already convinced that the market has become a proxy for the euro/dollar relationship," Kamal Naqvi, precious metals analyst with Barclays Capital, said in a daily report.
The precious metal was boosted the previous session after Washington issued a "high" level threat alert for major financial institutions in the United States.
But spot prices only managed to get as high as $394.10 before losing steam.
Naqvi expected the market to stick close to current levels until Friday's non-farm July payrolls data - a closely watched figure in financial markets.
"The market is increasingly focused on Friday's data and of course on next week's Fed rate decision," the trader said.
The Federal Reserve is widely expected to raise interest rates on August 10 for only the second time in four years.
As higher rates usually make a currency more attractive, any potential hike could be bearish for dollar-denominated gold as it would become more relatively more expensive.
Spot silver was similarly unchanged at $6.56/6.58.
Platinum retreated to $823.00/828.00 from $825.00/830.00 an ounce, while palladium traded at $213.00/218.00 against $215.00/220.00 in New York.
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