"As we broke the $272 level yesterday on the back of the strengthening euro we expect more short covering activity to continue to provide ample support on Thursday," said Frederic Panizzutti at MKS Finance in Geneva.

The euro was seen attracting larger buying flows for a moveover $0.9000 toward $0.9200, after earlier trading at its highest level since the September 22 Group of Seven intervention.

"At this stage we look for resistance at $277.50, however,scale up selling above $275.50 suggests that gold will struggle to move through here," said another analyst.

"Unless the currencies remain favourable and the funds comein and buy it again, gold is likely to drift lower," he warned. The $272 level was seen as a good support prop. At 1110 GMT spot bullion was at $275.10/$275.60 against Wednesday's New York close of $274.45/$274.95.

"The $275 area seems like it might be toppy, but one has to be cautious as not only has it broken up through technical areas, but also it still is very much watching the euro," added a trader.

"There cannot be that many shorts left out there to cover, which is why my gut feeling is that it is overdone now, but you just cannot ignore the euro, which has also broken up through key levels. $276 is my target, with a daily range of $273/76."

Silver followed gold's rally to pierce through key resistance at $4.75, having built a solid base above $4.70.

"Silver could likely target $4.80 over the short term on the back of the strengthening gold price," said one trader.

Spot metal was last traded unchanged at $4.75/$4.77.The platinum group metals (PGMs) were consolidating after long liquidation followed recent rallies which several market players considered to be overdone in the first place.

But consumer demand and light dealer buying were seen keeping both platinum and palladium steady. Platinum was last hovering around the key psychological level of $600, quoted at 1110 GMT at $600.00/$610.00 from a New York close of $603.00/$613.00. Palladium was consolidating around $850, last at$855.00/$865.00 versus 851.45/$861.45, dropping back from the all-time high set on Monday at $875.