Spot gold rose as much as 1. 5% to $1, 842. 89 an ounce after its most volatile day in fourteen days, with a trading band of more than $80. It stood at $1, 840. '04 by 0152 GMT.
The most-active US gold futures contract rose 1. 6% in order to $1, 846. 6, before easing to $1, 843. 90.
"Some investors, speculators and physical buyers have shown lots of buying interest at current prices, as they are much lower compared to a couple days ago, " said a dealer at a Tokyo-based bullion house.
Spot gold hit an archive high of $1, 920. 3 on Tuesday.
The faith in gold's long-term bullish pattern remained intact as concerns about global growth still run high, although the short term will probably remain choppy.
"Concerns about economic growth in the United States and euro zone could keep supporting gold prices. Even though we may see liquidation repeatedly along the way in which, gold will rise towards $2, 000, " the dealer said.
Gold dropped below $1, 800 in the previous session, after risk appetite surged and investors abandoned the rare metal for the stock market, as Germany's top court rejected lawsuits aimed from blocking German participation in emergency loan packages, but gave its parliament much more say in bailouts.
Adding to the risk appetite, Germany's industrial output leaped unexpectedly in July, offering hopes that Europe's largest economy may avoid economic downturn.
The sharp price drop triggered a flood of buying on Asia's bodily market, dealers said.
Investors will be watching a speech by US Leader Barack Obama on job creation to Congress, after data showed the economic climate added no new jobs in August.