Gold futures on the COMEX Division of the New York Mercantile Exchange bounced off on Thursday, as Greek leaders clinched a deal on reforms needed to avoid a disorderly default. The continued decline in U.S. dollar also added to the appeal of gold as an alternative asset.

The most active gold contract for April delivery added 9.9 dollars, or 0.6 percent, to 1,741.2 dollars per ounce.

Greek coalition party leaders concluded a deal on austerity measures to secure a new bailout package by European Union (EU) and International Monetary Fund (IMF) creditors on time to stave off a Greek financial meltdown next month, an official statement said on Thursday afternoon.

Gold future jumped on the news, as fears of an emerging credit crunch in the Eurozone has eased.

Meanwhile, the dollar moved lower for a third straight session against the euro, hitting its lowest in more than two months as Greece finally reached a deal on austerity measures.

The precious metal usually benefits from a weaker dollar, which makes the dollar-denominated gold less expensive for holders of other currencies.

Silver for March delivery rallied 21.3 cents, or 0.6 percent, to 33.917 dollars per ounce.