Gold firms as stocks slide, holds narrow range

By Sumita Layek

BENGALURU (Reuters) - Gold firmed near a two-week peak on Tuesday, as a slide in stock markets offset an uptick in the dollar, with the metal holding a tight range in light trade ahead of the U.S. Thanksgiving holiday.

Spot gold rose 0.1 percent to $1,225.56 per ounce at 1237 GMT, having earlier hit its highest since Nov. 8 at $1,226.56.

U.S. gold futures inched 0.1 percent higher to $1,226.10.

"(Trade) is relatively sideways at the moment... gold does not have its own momentum behind it, it is simply responding to external forces rather than any energy and vigour of its own," said Ross Norman, chief executive officer of Sharps Pixley.

"We see gold trading in a $1,215-$1,240 range for the remainder of the year."

The dollar index, which measures the greenback against major currencies, rose from its weakest in two weeks after cautious comments by Federal Reserve officials over the global outlook and weak U.S. economic data raised doubts on the pace of future rate hikes.

The Fed has raised rates three times this year, making it more expensive to hold non-interest-bearing gold. While a fourth rate hike is expected next month and three more next year, a strong majority of economists polled by Reuters say the risk is that the Fed will slow that pace down.

"The Feds have changed the landscape to a more dovish terrain suggesting that they too are turning a little bit risk-averse," Stephen Innes, APAC trading head at OANDA in Singapore, said in a note.

A downtrend in global stocks over the past two months triggered limited flows into bullion, a traditional safe store of value in times of economic or political uncertainty, but gains were held in check as investors also preferred the safety of the dollar.

"Trade tensions remain heightened between the U.S. and China, global equities are under pressure, while Brexit negotiations continue to create uncertainty across markets, keeping gold's safe-haven status intact," traders at MKS PAMP said in a note.

Investors are now keeping a close eye on a G20 summit in Argentina scheduled for later this month, when U.S. President Donald Trump is expected to meet Chinese President Xi Jinping to discuss their trade dispute.

While both leaders expressed optimism about resolving their respective issues ahead of the meeting, a top Chinese diplomat in veiled criticism of Washington said on Monday that the APEC summit's failure to agree on a communique resulted from certain countries "excusing" protectionism.

Meanwhile, holdings at SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 0.16 percent to 760.86 tonnes on Monday.

Among other precious metals, silver was flat at $14.42 an ounce, after hitting $14.48, its highest since Nov. 8.

Palladium slipped 0.6 percent to $1,155.32 per ounce, while platinum fell 0.7 percent to $847.49 per ounce.

(Reporting by Sumita Layek and Eileen Soreng in Bengaluru; Editing by Susan Fenton and Louise Heavens)