Gold inches down in Asia as growth concerns weigh

Gold edged lower on Wednesday, tracking falls in industrial metals and equities, as concerns about global economic growth weighed on market sentiment amid thin year-end trading volumes.

Investors were cautious as the latest data out of the United States sent mixed signals. Improving labour market conditions lifted consumer confidence to an eight-month high in December, but persistently weak house prices remain an obstacle to faster economic growth.

Industrial metals, along with equities, eased in thin holiday trade.

"There have been a couple of positive signs on the US economy, but it's hard to be hung up on them too much," said a Singapore-based trader.

 

"The economic prospects are so dire that it seems to have taken people's appetite away from commodities ,

especially in industrial metals, late in this calendar year."

Spot gold edged down 0.3% to $1,587.70 an ounce by 0724 GMT, on course for a third consecutive session of losses. US gold inched down 0.4% to $1,589.80.

Although gold traditionally has a safe-haven appeal, the euro zone debt crisis is threatening the global economy, causing a liquidity shortage in markets and forcing investors to abandon their gold positions to cover losses elsewhere.