Gold edged lower on Wednesday as the dollar recovered from losses spurred by weaker-than-expected U.S. retail sales data.
Data showing China's economy grew 7 percent in the first quarter, the slowest in six years, suggested that physical demand from the world's No. 2 consumer would remain tepid this year.
Spot gold was down 0.1 percent at $1,191.80 an ounce by 0301 GMT, after touching its lowest in two weeks at $1,183.68 on Tuesday.
Bullion fell as much as 1.2 percent overnight but pared losses at the close as the dollar retreated after data showed U.S. retail sales rose 0.9 percent in March, just below market forecasts for a 1-percent increase. The dollar has since regained some lost ground.
"The gold market is quite subdued at this time. There's no clear direction. I think we need a clearer catalyst down the road and that will come in the form of the FOMC meeting in two weeks' time," said Howie Lee, analyst at Phillip Futures.
The Federal Open Market Committee (FOMC) next meets April 28-29, with recent signals from most policymakers suggesting the U.S. central bank is still keen on raising interest rates in June despite recent weak economic data.
That has pulled gold from a recent seven-week top of $1,224.10 an ounce, as a potential rate hike curbs the appeal of non-interest yielding assets.
But raising U.S. interest rates this year, as most Federal Reserve officials expect, would be "inappropriate" because it would delay the return of too-low inflation to the Fed's 2-percent goal, Minneapolis Fed President Narayana Kocherlakota said.
U.S. gold for June delivery was off 0.1 percent at $1,191.40 an ounce.
Gold "continues to struggle for any upside ascendancy with a number of critical technical levels capping the market," MKS Group trader Jason Cerisola said, citing the $1,200 psychological level and $1,229, its 200-day moving average.
Premiums for physical gold on the Shanghai Gold Exchange picked up to $2-$3 an ounce over spot from just above a dollar earlier this week, although analysts say a slowing economy could cap Chinese demand.
"Coming from a low base in 2014, China's demand for gold should still grow this year. But given structural reforms and all this belt tightening because of the perceived slowdown, I don't think there'll be much demand for gold for jewelery or for investment," said Lee.SHOW MORE