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Gold prices rise as rally in shares loses steam


By N R

(Reuters) - Gold prices edged up on Thursday, after touching their highest since September in the previous session, buoyed as a rally in equities appeared to falter.

Spot gold was up 0.1 percent at $1,317.93 an ounce by 0655 GMT. On Wednesday, it marked its lowest since Sept. 15 at $1,326.56 an ounce.

U.S. gold futures were down 0.1 percent at $1,319.10 an ounce.

"Rising and strong growth suggest gold will remain supported as investors look for inflation protection," said Stephen Innes, of trading at

"Also, a highly-anticipated stock market correction is providing support on dips which continues to support the bullish gold narrative."

held near three-year highs on Thursday, buoyed by a surprise drop in U.S. production and lower crude inventories.

The New Year rally in Asian petered out on Thursday due to concerns about rising U.S. protectionism.

"Gold could test $1,327 in the short term and above which $1,362 will be opened ... equities are running at a high level of exuberance, confidence and valuation ... which in short stands for a bubble," said Amit Kumar Gupta, portfolio management services head at

"The belief 'this time it is different' is all set to get a rude shock."

Spot gold looks neutral in a range of $1,311-$1,329 per ounce, and an escape could suggest a direction, according to

"We feel that there will be sellers on rallies," said

"That being said, as Chinese seasonal buying picks up (ahead of the Lunar New Year), the downside should remain supported into February."

Meanwhile, holdings in the SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.35 percent to 828.96 tonnes on Wednesday from Tuesday. Holdings fell for a second straight day on Wednesday.

Among other metals, spot silver rose 0.2 percent to $17.01 an ounce. Prices fell to the lowest in nearly two weeks at $16.86 on Wednesday.

Platinum was mostly unchanged at $968.24 an ounce, after touching its highest in nearly four months at $974 in the last session.

Palladium climbed 0.1 percent to $1,084.40 an ounce, after seeing its worst one-day fall in over a month on Wednesday. Palladium, which rose to a record of $1,111.40 on Tuesday, fell 1.5 percent the session before.

(Reporting by in Bengaluru; Editing by and Joseph Radford)

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

First Published: Thu, January 11 2018. 13:13 IST