Gold holds near 3-1/2 month high as growth worries persist

Last Updated: Wed, Feb 19, 2014 03:39 hrs

​Gold eased a touch in early trade on Wednesday but remained near the highest level in more than three months as lingering worries about global economic growth burnished its safe haven appeal.


Gold eased 0.06 percent to $1,320.20 an ounce by 0012 GMT. It touched $1,332.10 an ounce on Tuesday, the strongest since October 31, before shedding some of the gains as investors booked profits from a three-day rally.

U.S. gold futures slipped 0.28 percent to $1,320.70 an ounce.

Economic data points to continued struggles around the globe, with German investor sentiment weaker and factory activity in New York state slowing in February.

Holdings of the largest gold-backed exchange-traded-fund (ETF), New York's SPDR Gold Trust fell 0.63 percent on Friday from Thursday, and the largest silver-backed exchange-traded-fund (ETF), New York's iShares Silver Trust decreased 0.59 percent during the same period.

Net gold demand fell 15 percent in 2013 as huge outflows from physically backed investment funds outweighed record consumer demand but that disinvestment is tailing off this year, the World Gold Council said on Tuesday.

Gold demand in India is expected to be robust in 2014 and likely to encourage an increase in smuggling if curbs on bullion imports remain, the World Gold Council said.

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Asian share markets looked set for a cautious session on Wednesday as investors keep a wary eye on interest rates in China, though the euro left the dollar in its dust after more soft U.S. economic data.

The euro was holding broad-based gains on Wednesday, having darted higher against the yen and sterling, while the dollar took a hit from soft economic data and news that foreign investors had been heavy sellers of U.S. assets.

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