The 36-year-old actress and the "Jealous'" hitmaker, 23, who sparked dating rumours last month, went clubbing together at Up & Down in the Meatpacking District, but were careful not to get too close, reported Female First.
"Last night they did not show PDA in the night club. They were just friendly. They are not hiding anything, but they also are not publicly talking about their romantic friendship," an eyewitness said.
The pair, who first met while they were dating other people last year and were "reintroduced" by Kate's brother Oliver Hudson over the summer, only recently sparked rumours of a romance, but have been secretly "hanging out casually over the past two or three months."
"She is having a great time and likes hanging with Nick. She feels great, and when they are in the same city they hang out," a source said.