Gold saw choppy trade in Europe on Wednesday, recouping earlier losses but lacking the drive to crack a key level above $580 an ounce, while platinum bounced off a six-month low.

Spot gold moved up to $578.80 in late afternoon trade, before retreating back to $575.80/576.55 by 1527 GMT, modestly up from $573.70/574.70 late in New York on Tuesday.

"The market is a bit confused at this stage. North Korea certainly triggered some reaction but that met with selling," said Frederic Panizzutti, analyst at MKS Finance.

"The bulls are not sure if this is the right level to enter the market for a move back toward $600 and the bears are not sure if this is the right level for a move to $550. For the time being, we expect gold to remain in a range."

Worries that North Korea would conduct a second nuclear test kept nerves on edge on Wednesday as Japan, facing Chinese and Russian reservations about the scope of U.N. sanctions, pressed for a stern response to Pyongyang.

Ignoring U.N. warnings, North Korea announced on Monday that it had conducted its first nuclear test. It said a U.S. "threat of nuclear war and sanctions" forced its hand.

Mining firms in South Africa, the world's biggest producer of gold and platinum, were given a boost on Wednesday as the government slashed rates of proposed mining royalties to lessen the impact of a controversial tax based on company revenues.

FAILURE AT $580

Bullion has tried three times in the past six days to crack $580 an ounce, but has been thwarted each time.

"There are still many shorts out in the market after several weak days and we don't rule out that some covering might set in if this psychological level is broken, which would encourage further buying," said Alexander Zumpfe, trader at Heraeus.

"With the dollar not moving so much against the euro at the moment and oil rather stable after it moved up from its lows, there seems to be a lack of follow-through buying right now."

Oil steadied after falling below $58 a barrel as OPEC haggled over the details of an output cut and the West's energy watchdog cut its oil demand growth forecast. Weaker oil prices lower gold's appeal as a hedge against inflation.

Another trader said he thought only North Korea was supporting prices.

"Left to its own devices, we would be targeting a break of $570. So, to be honest, I think the sidelines are the best place to be and you trade a break of $580.50 or $570," he said.

In other precious metals, platinum fell to its lowest since early April at $1,060 an ounce, tracking fund selling in Japan. It later pared losses to trade at $1,066/1,071, up from $1,063/1,068 late in New York.

Palladium was unchanged at $304/309 an ounce, while silver rose to $11.33/11.43 an ounce from $11.14/11.21.