Gold prices had been as low as $1661.91 on Tuesday but managed to add $1.21 to $1,675.96 an ounce by 0330 GMT.
"Gold is likely to stay within it's current range, if not drop slightly more in the absence of more talks from the fed about Quantitive easing but central bank buying and an ongoing rise in retail demand in Asia will drive gold prices higher in the coming weeks" said John Stanley, a senior broker at Accredited FX in San Jose, Costa Rica.
He goes on to say, "We are seeing a support level at around $1,650 right now, but another run at resistance at $1,700 is very plausible over the next few days."
Gold for April delivery fell further around 1% to $1,676.40 an ounce, in the wake of positive US economic data.
The Fed had said the economy was "expanding moderately,"
Fed policy meetings scheduled for April and June are likely to have an effect on the short term price of the yellow metal.
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