Gold steadied on Thursday but was on track to extend its losing streak to a fourth month, matching a similar run more than 12 years ago, as a deepening euro zone debt crisis buoyed the dollar and dented bullion's safe-haven draw.
Gold, which has fallen 6% this month, has been outshone by low-risk assets including US Treasuries and German Bunds amid fears of Greece's exit from the euro zone and growing debt trouble in Spain.
The dollar, a safe haven in its own right, climbed more than 5% this month against a basket of currencies and pressured commodities priced in the greenback.
Investors had pinned hopes on further monetary easing by central banks to keep lending costs low, which would raise the inflation outlook and so benefit gold, but the lack of easing prospects in the short term has kept sentiment subdued.
"The situation in Europe isn't likely to improve much, and may need additional stimulus measures, but we don't expect to see them any time soon," said Hou Xinqiang, an analyst at Jinrui Futures in the southern Chinese city of Shenzhen.
Hou said if the situation in Europe worsens, gold could pierce through the $1,530 level and fall towards $1,500.
Spot gold traded little changed at $1,561.50 an ounce by 0708 GMT. US gold inched down 0.1% to $1,561.50.
Investors are closely watching data, including US preliminary first-quarter gross domestic product due later in the day, a US employment report and China's official purchasing managers index due on Friday, to assess the state of the global economy.
Contracts to purchase previously owned US homes unexpectedly fell in April to a four-month low, undermining some of the recent optimism that the housing sector was touching bottom.
In Asia's physical market, buying interest emerged when prices fell to a two-week low near $1,530 in the previous session but selling kicked in after prices rebounded, dealers said.
"We've confirmed that $1,530 is a pretty good support level for now. In the domestic market, physical buying interest rises whenever prices fall towards that level," said a a Shanghai-based trader.
In other precious metals, spot platinum edged up 0.3% to $1,399.49, off a 2012 low of $1,382.15 hit on Wednesday.
