Gold made attempts to break above the key resistance level at $1,600 in the past two days but failed, and has since been drifting around $1,590 as investors remained cautious when the fate of Greece and euro zone remains in limb
Market participants will closely watch an informal EU summit on Wednesday, during which French President Francois Hollande is expected to push for mutualised European debt, an idea that Germany has opposed.
Equities extended gains, partly riding on optimism about fresh action at the Wednesday meeting, but some analysts were less sanguine about its influence on gold, at least in the short term.
"If the politicians fail to make an agreement, the market will get jittery - people will look for liquidity, the dollar will rally, assets being sold and gold will come under
pressure," said Dominic Schnider, an analyst at UBS Wealth Management in Singapore.
A worsening situation in the euro zone would eventually prompt the European Central Bank to print more cash, which benefits gold as a non-yielding asset, he added.
If European leaders agreed on new effort to address the debt crisis, gold may falter as its safe haven appeal diminishes.
Spot gold inched down 0.2 percent to $1,589.93 an ounce by 0351 GMT. U.S. gold was nearly flat at $1,589.80.
Physical market activities were slow as prices stalled below $1,600, as buyers were not convinced of a return to the uptrend despite a swift rally that pulled prices up from a 2012 low less than $1,530 last week.
"If we break above $1,600 and even go higher to confirm the bull trend, we will see more buying," said a Hong Kong-based dealer. "Otherwise the market will be quiet."
The gold bar premium in Hong Kong was steady from last week at $1.20 to $1.70 an ounce above London prices, while in Singapore, premiums eased to $1 from $1-$1.20 last week as buying slowed, dealers said.
The most-active gold for June delivery on the Multi Commodity Exchange rose to 29,174 rupees per 10 grams on Monday, its highest since early May, just 0.9 percent below its historical high while dollar-priced spot gold traded 17 percent below its all-time high above $1,920 hit last September.
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