Gold steady ahead of US GDP data

[BENGALURU] Gold steadied on Friday after retreating from a more than six-week high hit in the previous session, with investors looking for cues on the health of the US economy from second-quarter gross domestic product data due later in the session.

A recovery in the world's biggest economy would give the beleaguered US dollar some respite from the recent sell-off, and also dent the likelihood for higher interest rates which benefits non-interest yielding and safe-haven gold.

"Our feeling is that the (GDP) number will be in line to somewhat below the 2.8 figure forecast, in which case we could see another modest advance in gold," said INTL FCStone analyst Edward Meir.

"We expect to see a lot of action around the second-quarter GDP number." Spot gold was little changed at US$1,257.55 per ounce at 0421 GMT, but was up slightly this week in what could be the precious metal's longest spell of weekly gains since May.

US gold futures for August delivery fell 0.2 per cent to US$1,257.60 per ounce.

The US dollar index was unchanged at 93.860 against a basket of six major currencies.

"I think it is more important to keep an eye on the dollar and whether it continues to support gold," said Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong.

A weaker US dollar makes bullion cheaper for non-US investors. Higher interest rates would push yields up and likely boost the US dollar.

Meanwhile, holdings at the SPDR Gold Trust , the world's largest gold-backed exchange-traded fund, fell 0.45 per cent to 791.88 tonnes on Thursday from 795.42 tonnes on Wednesday.

Among other precious metals, silver was almost flat at US$16.53 per ounce, heading for a third weekly gain.

Platinum fell 0.1 per cent to US$921.55 per ounce and was on track for its first weekly decline in three.

Palladium fell 0.1 per cent to US$871.55 per ounce. In the previous session, palladium hit its highest in over a month.

REUTERS