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Gold gains as stocks fall; weak U.S data spurs safe-haven demand

Reuters  |  BENGALURU 

By Nithin ThomasPrasad

(Reuters) - Gold edged up on Thursday from a near three-week low hit in the previous session, supported by softer U.S. economic data and a fall in Asian following a report that President Donald Trump was being probed for possible obstruction of justice.

Weaker U.S. retail and inflation data overshadowed a rate hike by the U.S. Federal Reserve on Wednesday, raising doubts about the improvement in the economy and pressurizing the dollar.

"Although the Fed is saying the data is transitory, the market is struggling to align with this view," said Jeffrey Halley, senior market analyst at OANDA.

"Thus we are seeing the under pressure which has been positive for gold in the short-term."

Spot gold rose 0.2 percent to $1,262.86 per ounce by 0800 GMT. It hit a low of $1,256.65 in the previous session, its weakest since May 26.

U.S. gold futures for August delivery fell 0.9 percent to $1,264.50 an ounce.

"We are looking for gold to hold support around USD $1,260, with expectations that the recent soft U.S. data and ongoing geopolitical concerns should be supportive," MKS PAMP trader Sam Laughlin said in a note.

Risk sentiment was hit after Washington Post reported that Trump is being investigated by special counsel Robert Mueller for possible obstruction of justice.

As long as uneasiness around the Trump government among speculators and investors exists, gold will hold up pretty well, said Yuichi Ikemizu, Tokyo branch manager at ICBC Standard Bank.

Gold considered a safe haven during times of political and financial uncertainty.

"Spot gold was also supported by short-term interest in physical gold in Asia, especially from Shanghai this morning," Halley said.

In the wider markets, U.S. stock futures and Asian slid on Thursday with MSCI's broadest index of Asia-Pacific outside Japan dropping 0.7 percent.

The dollar index was little changed against a basket of currencies on Thursday after having slid to its lowest since November on Wednesday.

Among other metals, silver rose 0.2 percent to $16.91 per ounce after it snapped a five-session losing streak and settled higher on Wednesday.

Palladium fell 1.1 percent to $853.50 per ounce, while Platinum was down 0.6 percent at $929.50 per ounce .

(Additional reporting by Vijaykumar Vedala in Bengaluru; Editing by Richard Pullin and Vyas Mohan)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

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