Gold rose back above $1,575 an ounce in Europe on Tuesday, tracking gains in the euro as the single currency edged off two-year lows against the dollar, but both remain vulnerable to fallout from the euro zone debt crisis.
Spot gold was up 0.2 percent at $1,575.16 an ounce at 0915 GMT, while U.S. gold futures for June delivery were up $6.00 an ounce at $1,574.90.
Gold is on track to end May some 5 percent below its end-April level - its worst monthly performance this year - and to decline for a fourth successive month for the first time since January 2000.
It has struggled to overcome this month's hefty losses in the euro. Gold reacted positively to stresses in the euro zone in 2011 as investors bought the metal as a haven from risk, but it is now under pressure from dollar strength.
The euro edged up against the dollar on Tuesday as investors cut hefty bearish bets in the currency, but worries about Spain's banking sector and Greece's election next month kept it close to its lowest levels in nearly two years.
"Gold will be in a critical position at least until the Greek general election taking place on June 17," Peter Fertig, a consultant at Quantitative Commodity Research, said.
"Should there be a majority for a government led by the conservative New Democracy, chances are quite good that gold would rebound," he said. "That would also support the euro, it would support stock markets."
European stocks rose initially after a strong session in Asia, where the spotlight fell on the prospect of further policy stimulus in China. Among other assets seen as higher risk, oil and copper prices firmed.
German Bund futures held within sight of record highs as worries over the cost of shoring up the Spanish banking system spurred strong demand for safe-haven assets.
PAYROLLS DATA EYED
Attention is already shifting towards key U.S. employment data due Friday, an important barometer for economic recovery. The non-farm payrolls report is expected to show the world's largest economy added 150,000 new jobs in May.
A shift in focus from European to U.S. economic problems could prove positive for gold, if it takes some of the heat out of dollar strength, analysts said.
From a technical perspective, gold has found solid support just below $1,530 an ounce, but has struggled to breach the $1,600 an ounce level.
Among other precious metals, silver was up 0.3 percent at $28.48 an ounce. The metal has underperformed gold this month, and is on track to fall 8 percent, having touched a 2012 low earlier in May at $26.73 an ounce.
Holdings of silver-backed exchange-traded products fell by nearly 25,000 ounces on Monday, Reuters data showed.
The metal has struggled to attract significant fresh investment after two sharp bouts of volatility last year, most notably when it slid more than 30 percent in just six sessions after hitting record highs in April 2011.
"Following a sharp correction in the second quarter of 2011, silver remains an attractively priced safe haven commodity relative to gold," Morgan Stanley said in a note.
"However, silver's well attested volatility, its vulnerability to weakening industrial demand, and weaker supply credentials make it a less fundamentally supported market than gold at present."
Spot platinum was up 0.1 percent at $1.432.99 an ounce, while spot palladium was down 0.2 percent at $600.82 an ounce.
The gold/platinum ratio, a measure of the number of platinum ounces needed to buy an ounce of gold, held at its highest since January at 1.1. Platinum has maintained its historically unusual discount to gold for much of the last nine months. (Reporting by Jan Harvey. Editing by Jane Merriman)