Gold edged up on Friday after investors dumped riskier assets as stock markets crumbled, while a rise in ETF holdings to a record high indicated persistent worries over the global economy.
Investors were also looking to the Group of 20 summit this weekend in Toronto, where leaders from rich and developing nations will discuss how to plot the world's emergence from the worst financial crisis since the Great Depression.
But any disagreements over the best ways to ensure both growth and fiscal responsibility would add to global economic uncertainty, which dealers said could lift gold's safe-haven appeal. For full coverage, click:
Spot gold added 35 cents to $US1244.40 in afternoon trade, having hit an intraday low of $US1240.35. Gold gained nearly 1 per cent towards $US1250 on Thursday as US stocks tumbled but was still below a record high above hit $US1264 on Monday.
"There's still a lot of uncertainty towards a recovery. That's why they are putting on their bets into gold," said Wong Eng Soon, investment analyst at Phillip Futures in Singapore, referring to investors' interest in exchange-traded fund.
Gold was still consolidating after hitting an all-time high this week but a correction was unlikely to send the price below $US1225 an ounce, said Wong.
The world's largest gold-backed exchange-traded fund, SPDR Gold Trust said its holdings rose to a record high at 1,316.177 tonnes as of June 24 from the previous high of 1,313.135 tonnes set on June 22. "Despite repeated setbacks, it is not looking all that bad for investors and speculators who are betting on rising gold prices," said Heraeus Precious Metals in a weekly report.
"At least the general environment has not changed much."
US gold futures for August delivery hardly changed at $US1245.7 an ounce. It had settled around $US11 higher on Thursday as lingering European credit contagion fears pressured equity markets.
Reuters