Gold prices stayed firm on Wednesday as stronger physical demand for the precious metal, ahead of India's late-October festival season, offset a steady US dollar. Demand for bullion is expected to pick up ahead of festivals such as Dhanteras and Diwali, which is also a time when gold is traditionally given as a gift. "A recovery in physical demand provided the foundation for the rally that carried over into later trading," HSBC analyst James Steel said in a note.
"Gold investors brushed aside the negative impact on bullion of a firmer USD." Spot gold was up about 0.1 percent at $1,275.00 an ounce by 0655 GMT. In the previous session, it hit $1276.67, its highest since October 5. US gold futures settled up 0.16 percent at $1,275.6 an ounce. Flows into exchange-traded funds and pick up in Asian demand were keeping the metal stable, said Dominic Schnider of UBS Wealth Management in Hong Kong. Holdings of the SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 0.34 percent to 956.83 tonnes on Tuesday from 953.56 tonnes on Monday.
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