Gold rebounds as US GDP beats estimate

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 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 were mostly unchanged at $1,259.10 per ounce at 0656 GMT, and 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 0.1 percent to $1,258.50 per ounce.

The dollar index was nearly unchanged at 93.816 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 dollar makes bullion cheaper for non-US investors. Higher interest rates would push yields up and likely boost the dollar.

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

Spot gold is biased to break a support and fall more into a zone of $1,243.41-$1,247 per ounce, following its failure to break the resistance at $1,264, according to Reuters technical analyst Wang Tao.

Among other precious metals, silver rose 0.1 percent to $16.54 per ounce, heading for a third weekly gain.

Platinum rose 0.2 percent to $924.25 per ounce but was on track for its first weekly decline in three.

Palladium fell 0.1 percent to $871.25 per ounce. In the previous session, palladium hit its highest in over a month.