Gold rose on Thursday on a softer dollar, consolidating further above the key $1,900 level, with an ultra-low interest rate environment and worries over global economic fallout from mounting COVID-19 cases underpinning its safe-haven appeal.
Spot gold was up 0.6% at $1,928.94 per ounce by 0516 GMT, a day after slipping below the $1,900 level in choppy trade. US gold futures eased 0.5% to $1,939.79.
"The fall that took gold below $1,900 has flushed out a lot of weak longs and it looks like now we're going for a bit of consolidation and gold is preparing for another move higher," said Michael McCarthy, chief strategist at CMC Markets.
"The outlook remains positive in a lower interest rate environment, particularly with the weakening U.S. dollar. The settings are unchanged, we're seeing record amount of stimulus and have real fears about the risks to growth."
The dollar slipped 0.2% against rivals, making gold cheaper for holders of other currencies. Gold, which pays no interest, also benefits from low interest rates as this reduces the opportunity cost of holding bullion.