Spanish and Italian assets were under pressure again amid concerns about Spain's fiscal outlook and the sluggish euro-zone data.
In overnight news, European Union economic data showed Euro zone inflation was unchanged in September, at a 2.6% annual rate.
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European markets closed broadly lower amid the tumult in Cyprus and weak euro-zone economic data.
Overnight developments include German and Euro zone GDP data that was stronger than expected.
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That data suggests the Euro zone is still in overall economic contraction in the first quarter.
Fresh EU economic data Friday showed Euro Zone inflation up-ticked just a bit, to 2.7% on an annual basis.
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In Europe, there was some better-than-expected euro zone manufacturing data issued Monday, which helped to lift European stock markets.
In Europe overnight there was fresh data showing the Euro zone continues to see a very fragile financial sector.
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Euro zone economic data released Tuesday showed producer price inflation rose sharply in August, mainly due to higher oil prices.
Also, German and Euro zone GDP data was stronger than expected.
Investors were looking ahead to euro-zone inflation data, which if low, could be interpreted as a sign that the European Central Bank can lower interest rates.
European stocks mostly declined, with the Stoxx Europe 600 down 0.4%, after industrial-production data in the euro zone showed output fell in November from the previous year.
Investors are also weighing the prospects for an interest-rate cut or other action by European Central Bank officials scheduled to meet Thursday, following another wave of disappointing economic data from the euro zone in recent days.
Asian markets advanced Wednesday on robust earnings from Apple and better-than-expected euro-zone economic data, with stocks in Tokyo ending near a three-month high as the yen weakened on Japan's first annual trade deficit in three decades.
European stocks closed in the red Wednesday and the euro erased gains versus the dollar as the woes of the euro zone continued to bug investors, highlighted by lackluster euro-zone economic data and a subdued German 10-year government bond auction.
"The latest euro-zone inflation and PMI business activity data do nothing to alter our view that the euro zone is set for another very tough year in 2012, " said Ben May, European economist at Capital Economics.
New data indicate that euro-zone industrial orders plummeted in September, falling by 6.4%.
Even with all of the dollar negative data though, the support zone slightly below 1.0300 has held sturdy.
Still, the data company Markit said Euro zone economic activity has bottomed out and is on the upswing.
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European Union economic data released Tuesday showed Euro zone inflation was unchanged in September, at a 2.6% annual rate.
The data out of the euro zone did little to inspire further strength, but nor did it stifle any of the recent optimism over the common currency.
Recent data releases suggest the euro-zone economy shrank again in the three months to March, which would be its sixth consecutive quarterly contraction.
Meanwhile new data suggested that economies within the euro zone were also on the path the recovery.
Data published yesterday showed the Euro-zone contracted in Q3, its second consecutive decline, resulting in a technical recession.
European markets pared earlier losses but closed lower, amid data showing some improvement in the euro zone's manufacturing sector.
He, however, adds that RBI rate action will continue to be driven somewhat mechanically by the inflation data that remains way above its comfort zone.
The markets made a bit of a recovery from the lows of the day but remained in negative territory amid lackluster economic data and ongoing concerns over the euro zone.
In Europe, shares of big manufacturing companies and miners declined on weak euro-zone and U.S. data.
Lackluster economic data as well ongoing concerns in the euro zone sent the markets into negative territory today.
Meantime, retail sales data in the 17 countries of the Euro zone rose slightly in August, for the fourth straight monthly gain.
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