Gold edged down on Thursday after the U.S. dollar rebounded against the euro, while firmer oil prices offered little help as investors turned cautious on bullion after it failed to sustain recent gains. Gold dropped below a psychological level of $1,100 an ounce as uncertainties in the outlook for the euro blamed on Greece's debt crisis prompted some investors to shift their money to the dollar or stocks. Gold struck 1-month high around $1,130 on Monday. Spot gold [XAU= 1092.7 -4.55 (-0.41%) ] was at $1,097.05 an ounce by 0143 GMT, down 20 cents from New York's notional close on Wednesday, when it fell as low as $1,089.45 an ounce, its weakest in almost two weeks. Gold was nearly 9 percent below a record of around $1,200 hit in December. "The perception is we're back in a period of a little bit of limbo," said Darren Heathcote, head of trading at Investec Australia in Sydney. "Now we need to get things started again. Either we are going to go downhill further or we are going to continue with a recovery. I think we are just waiting for some impetus to push us in one direction or the other," he added. The world's largest gold-backed exchange-traded fund, SPDR Gold Trust [GLD 107.36 -0.53 (-0.49%) ], said its holdings stood at 1,106.987 tons as of Feb. 24, unchanged from the previous business day. The holdings hit a record high of 1,134.03 tons on June 1. U.S. gold futures for April delivery fell $1.0 to $1,096.20 per ounce. It had hit an intraday low around $1,090 on Wednesday before bouncing slightly at the close, suggesting that bargain hunters would snap up gold at lower levels. The euro [EUR=X 1.3472 -0.0059 (-0.44%) ] fell to $1.3497 on Thursday after gaining around 0.2 percent in the previous day as worries about a possible downgrade of Greece lingered. The dollar had weakened on Wednesday as investors trimmed huge long positions in the greenback after the Federal Reserve reiterated interest rates will stay low for a long time. German Chancellor Angela Merkel said in a newspaper interview published on Wednesday that the euro is in a difficult position for the first time but will weather the storm, adding that debt-ridden euro zone members such as Greece had to tackle their own problems. "We have a few contradicting factors. The euro is weak but other commodities and crude oil are firm, that's why gold doesn't drop so much," a dealer in Hong Kong said. U.S. crude futures edged higher above $80 a barrel on Thursday, adding to gains made the previous day after Bernanke reaffirmed his commitment to keeping interest rates low. Shanghai copper rose 0.1 percent, tracking gains on the LME. Gold, traditionally seen as a safe haven in times of economic uncertainty, has been moving in tandem with asset classes perceived as riskier, including equities and other commodities such as oil.

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