Int'l gold steady as investors wait for clues on stimulus

Spot gold had inched up 0.1% to $1,605.14 an ounce by 0039 GMT

Gold hovered above $1,600 an ounce on Thursday, as investors waited for more clues on the timing and extent of any further stimulus from central banks after U.S. data painted a mixed picture on the health of the world's largest economy.

Fundamentals

* Spot gold had inched up 0.1 percent to $1,605.14 an ounce by 0039 GMT, off a 1-1/2 week low of $1,589.69 hit in the previous session.

* The U.S. gold futures contract for December delivery was trading nearly flat at $1,607.70.

* U.S. consumer prices were flat in July for a second straight month and the year-over-year increase was the smallest in more than 1-1/2 years, giving the Federal Reserve room to ease policy further to tackle high unemployment.

* Although other reports showed home-builder sentiment in August hit its highest level in more than five years, while industrial production rose in July, leading some economists to argue the Fed does not need to launch another round of bond purchases this year.

* In the government debt market, U.S. Treasuries yields rose as better-than-expected industrial output data sent investors to riskier assets. German Bunds, also seen as a top safe-haven choice, fell to a six-week low as concerns about the euro zone debt crisis temporarily eased.

* Investors will seek trading cues from more data later in the day, including U.S. housing starts and weekly jobless claims.

Market news

* U.S. stocks spent another session in a tight range on Wednesday, with the S&P 500 ending a few points higher and extending a rally that seems to be happening in slow motion.

* The dollar held near a fresh one-month high against the yen in early Asian trade on Thursday, while the euro nursed modest losses having succumbed to a bit of selling pressure overnight in thin market conditions.