Gold inched up on Wednesday, after declining the most in nearly two weeks in the previous session, as U.S. recession fears triggered by a sharp decline in U.S. Treasury yields and weak data weighed on the share markets.
Spot gold was up 0.1 percent at $1,316.09 per ounce as of 0419 GMT. U.S. gold futures were also up about 0.1 percent at $1,315.70 an ounce.
"Investors are very cautious on Treasury yield curve inversion, which had proven many times as early signal for a recession," said Margaret Yang, a market analyst with CMC Markets, Singapore.
Yang said the falling Treasury yields gave market sufficient reason to take some hedging measures, which along with weaker-than-expected U.S. data supported the non-interest bearing gold.
U.S. homebuilding fell more than expected in February, while consumer confidence ebbed in March, offering more evidence of a sharp slowdown in economic activity early in the year.
Asian shares slipped on Wednesday, giving up small gains made the previous day as investors tried to come to terms with a sharp shift in U.S. bond markets and the implications for the world's top economy.
Though benchmark 10-year note yields were steady above their lowest level since December 2017, the yield curve was inverted by around four basis points.
Uncertainties around Brexit are also increasing bullion's safe haven appeal, analysts said. The next Brexit vote is due later in the day.
The Sino-U.S. trade negotiations scheduled to start on Thursday in Beijing are also watched keenly.
"There is a strong hurdle at higher levels close to $1,325 per ounce mark which may lead to some consolidation in gold prices," said Sugandha Sachdeva, vice-president, metals, energy and currency research, Religare Broking Ltd.
"But once that is taken out convincingly, further run-up in prices towards $1,350 per ounce looks plausible."
Limiting gold's gains was a stronger U.S. dollar, which rose 0.2 percent to its highest in two weeks.
"We need to pay attention to U.S. dollar strength which is negatively correlated to gold. If dollar continues to strengthen that could put pressure on gold," Yang said.
Among other precious metals, palladium gained 0.3 percent to $1,544.60 per ounce.
Silver was flat at $15.43, while platinum was up 0.6 percent to $860 an ounce.