Gold prices rose back above $1,030 an ounce in Europe on Thursday as the dollar gave up gains against the euro ahead of key US economic growth data due later in the session.

Some physical demand is returning to the market as prices plumb three-week lows, dealers said, helping the metal shrug off a further small outflow from the world's largest gold-backed exchange-traded fund.

Spot gold was bid at $1,034.65 an ounce at 1014 GMT, against $1,026.85 late in New York on Wednesday. Earlier it touched a three-week low of $1,025.75 an ounce.

'Some stabilisation in the US dollar overnight has helped gold, and we have some decent interest in the physical side,' said Walter de Wet, an analyst at Standard Bank. 'We see some base-building going on.'

'Our view is that we are going to see a general trend for dollar weakness in the next quarter,' he added.

The euro edged higher against the dollar as the market took a breather ahead of US gross domestic product data at 1230 GMT, which is expected to show the world's largest economy returned to growth in the third quarter.

A weak reading could undermine confidence in the global economy, potentially prompting selling of higher-yielding currencies in favour of the dollar, hurting gold, analysts said.

On the wider markets, European shares turned positive after a choppy start, while world stocks hit another three-week low on Thursday as disappointing European corporate results and weak US data fuelled concerns over the economy.

Oil prices meanwhile firmed above $77 a barrel, making up some lost ground after the previous session's 2.6 per cent decline, as investors awaited the US data.

Strength in crude prices often helps gold, as it supports interest in commodities as an asset class, and because bullion is sometimes viewed as a hedge against oil-led inflation.

On the physical side of the market, gold traders in major bullion consumer India continued to stock up for the wedding season, tempted by the recent price decline.

'Traders have responded well to the recent correction after Diwali, and a lot of orders are getting filled,' said Pinakin Vyas, chief-manager treasury of Mumbai's IndusInd Bank.

On the investment side, New York's SPDR Gold Trust reported an outflow of a further 1.22 tonnes on Wednesday, the third such sale this week.

Standard Bank's de Wet said the fact that gold is managing to hold at such elevated levels despite fairly weak investment demand suggested a return to dollar weakness could result in a fresh move higher.

In supply news, Gold Fields, the world's fourth largest gold producer, said power tariff hikes proposed by utility Eskom would have a big impact on its business, but could not say if it would have to shut any shafts.

Elsewhere Interfax news agency on Thursday quoted a Finance Ministry official as saying the Russian government plans to sell 25 tonnes of gold.

Among other precious metals, spot silver was bid at $16.32 an ounce against $16.09, tracking gold higher after the previous session's 3.3 per cent decline.

Platinum was at $1,316.50 an ounce against $1,303.50, while palladium was at $317 against $313.50.

ETF Securities said it saw a 6,401 ounce or 1.7 per cent inflow into its ETFS Physical Platinum exchange-traded commodity on Wednesday, while holdings of its ETFS Physical Palladium ETC rose nearly 1 per cent to record levels.-Reuters