"Gold prices firmed on Monday in line with stock markets and the euro after Chinese data signalling quicker growth sharpened the appetite for assets seen as higher risk, though uncertainty over the U.S. budget talks kept a lid on gains.
The euro hit a six-week high and shares rose as signs of growth in China and a slower contraction in Europe lifted demand. The latest readings from both official and private sector surveys of China's vast manufacturing sector showed activity picked up November.
A final reading of the euro zone's manufacturing Purchasing Managers Index (PMI) for November also showed factory activity declining at a slower rate.
Spot gold last inched down 0.1 percent to around $1,713 an ounce, after dropping a slight 0.3 percent in November. U.S. gold gained 0.3 percent to about $1,718 per ounce.
U.S. PMI data, a measure of industrial activity, for November is due at 1358 GMT on Monday.
Other commodities also climbed, with oil prices rising a quarter of a percent.
Greek government bond prices rallied on Monday after details were announced of its debt buy-back, a central part of a deal to release aid funds to the economically crippled country. That also helped demand for higher-risk assets.
Yields on other lower-rated debt also fell, though German Bund futures stuck to gains because of underlying concerns over U.S. budget talks. Uncertainty over the outcome of talks to avert a U.S. fiscal crisis also underpinned gold.
If the legislators fail to reach an agreement, $600 billion in tax hikes and spending cuts - dubbed the "fiscal cliff" - will automatically start in early January, threatening to push the world's top economy into recession.
Some analysts say lengthy and acrimonious talks could prompt safe-haven buying of gold. However, other analysts warned long-drawn-out talks could hurt the precious metal if they spark broad-based selling of stocks and commodities.
Lower Prices Tempt Buyers
Gold buyers in India, the world's biggest bullion consumer, continued to stock up on the metal as prices hovered around their lowest in a month.
Underscoring investors' interest in the metal, holdings of gold-backed exchange-traded funds hit a record high, and speculators raised their net length in gold for the third straight week.
The U.S. Mint sold more American Eagle gold coins last month than in any November in 14 years as uncertainty surrounding the U.S. fiscal crisis and the presidential election triggered safe-haven buying, dealers said.
Sales reached 136,500 ounces, more than three times last November's 41,000 ounces. Silver American Eagle sales reached 3.1595 million ounces last month.
Spot silver was last up 0.4 percent at about $33 an ounce, while the gold/silver ratio, which measures the number of silver ounces needed to buy an ounce of gold, was at 51.3, having touched an eight-month low on Friday at 50.4.
Among other precious metals, spot platinum inched down 0.4 percent to $1,593 an ounce, and palladium last traded at $681 per ounce, up 0.6 percent.
Platinum group metals, which are chiefly used in autocatalysts, are heavily exposed to trends in car buying as a source of demand.
The world's biggest carmaker, Toyota Motor Corp, said on Monday its sales in China fell 22.1 percent last month, highlighting the lingering impact of a territorial row between China and Japan."