London, Aug. 20: Gold held near $1,230 an ounce on Friday as concern over the outlook for the global economy fuelled interest in the metal as a haven from risk, but gains in the dollar kept the metal in a narrow range.
Gold touched $1,237.15 an ounce on Thursday after weak US jobless and manufacturing data knocked the dollar and boosted interest in assets seen as lower risk. It later pared those gains as the US currency recovered.
But lingering concerns that US growth will be sluggish is continuing to support gold, analysts said.
“The glaring difference between the US economy and the rest of world and the fear of a probable second round of economic recession has been serving as fodder to the bulls,” said Mr Pradeep Unni, senior analyst at Richcomm Global Services. “Technically and from a momentum perspective the trend on gold remains up, but this rising trend may succumb to profit taking if the equity markets witness a sell-off.”
“However, such dips are likely to be used as fresh buying opportunities, given the increasing concern about the fate of fiat currencies,” he added.
The dollar rose by one per cent against the euro, which fell after the European Central Bank governing council member, Mr Axel Weber, said the central bank should extend unlimited liquidity to banks past the end of the year. The dollar strength weighs on gold, as it curbs it’s appeal as an alternative investment and makes dollar priced assets more expensive for holders of other currencies.