Spot market prices for buying gold hovered just above $1,600 per ounce Thursday morning in London, well within their trading range of recent weeks, having risen back above that level amid ongoing speculation over quantitative easing.
"Gold remains trapped in a range where it has been for two-and-a-half months," says a note from bullion bank Scotia Mocatta.
Data published by the World Gold Council Thursday show that global gold demand between April and June was down on the same period last year, although central banks were buying gold in record quantities.
Silver prices meantime hovered just below $28 per ounce Thursday morning, also in line with recent trading. Stocks and commodities were also flat and US Treasury bonds fell.
A day earlier, gold prices climbed back above $1,600 per ounce Wednesday, after news that US consumer inflation fell by more than expected last month.
"This was enough to stimulate the QE3 rumor, yet again," says a note from Swiss precious metals group MKS, referring to a potential third round of quantitative easing from the Federal Reserve.
Another round of QE from the Fed looks "unlikely in the short term," says a note from Credit Suisse.
"What counts at the moment is the 'real' economy and while certainly far from booming, this does not appear weak enough for the Fed to act."
"Gold's performance reflects the continuing challenging economic climate," says Marcus Grubb, the WGC's managing director, investment.
"A softness in India and China, who between them represent over 45% of the total second quarter jewelry and investment demand accounts for much of the slowing of global gold demand. "
Indian demand in the three months to June was down 38% compared to the same period last year, although India reclaimed its traditional position as the world's biggest gold buying nation with demand at 181.3 tonnes. Rupee gold prices hit record highs in Q2 as the rupee fell against the dollar.
Demand from China meantime fell 7% year-on-year to 144.9 tonnes.
"Chinese consumers were discouraged by the slowing of GDP growth," says the WGC report, "as well as by the lack of a clear trend in the gold price."
China's dip in demand is expected to be a "temporary aberration" says Cameron Alexander, senior metals analyst at precious metals consultancy Thomson Reuters GFMS.
"Through all the uncertainty, it is clear that gold's fundamental properties as a vehicle for capital preservation and a source of liquidity continue to endure," says Grubb.
"This is evident from the activity of central banks, the ultimate long term investors, which continue to increase their gold holdings to diversify reserves and protect against reliance on one or more foreign currencies."
On the supply side, gold mining production in Q2 was up by just three tonnes year-on-year.
"Mine production is likely to remain in a consolidation phase for the remainder of 2012," says the WGC report.
Barrick Gold, the world's largest gold producer, looks set to sell its 74% stake in London-listed African Barrick, the Financial Times reports.
State-owned producers China National Gold and Zijin Mining Group are two potential buyers.
Recyclers of scrap gold in Portugal meantime are finding it harder to source bullion from would-be gold sellers as many have already sold all their gold, Bloomberg reports.
Across the Atlantic, seven of the world's biggest banks have received subpoenas from New York's attorney-general as part of an investigation into allegations of Libor manipulation, according to press reports.
Barclays, Citigroup, Deutsche Bank, HSBC, JPMorgan Chase, Royal Bank of Scotland and UBS have all been asked to provide documents as part of the probe into alleged rigging of the interbank rate, used as a reference point for a wide variety of financial transactions.