Gold rose on Thursday, benefiting from a retreat in risk appetite after soft US economic data knocked stocks, the dollar and industrial commodities lower. Spot gold was bid at $1,211.70 an ounce at 1528 GMT against $1,207.50 late in New York on Wednesday. US gold futures for August delivery rose $5.40 to $1,212.40.
Stock markets weakened in Europe and the United States after a lower-than-expected reading from the Philadelphia Federal Reserve's index of business conditions in the US Mid-Atlantic region pointed to sluggish US growth. Concerns over the economy tend to support gold, but the precious metal remains in a narrow range. "Bargain hunters want to buy it around $1,200, and (at) $1,217, profit takers are all lined up," said Afshin Nabavi, head of trading at MKS Finance.
On the currency markets, the euro extended gains against the dollar, nearing $1.29 for the first time in two months, after data showed the Philadelphia Federal Reserve's business conditions index fell in July. From a technical perspective, gold is poised to creep higher after its sharp correction from record highs at $1,264.90 an ounce in late June. Chart support combined with re-emerging physical demand prevented the metal from falling substantially below $1,200 an ounce, and it has successfully held above that level for the last two sessions.
"With daily momentum pointed higher and the market pulling away above trendline support at $1,182, we are maintaining our near-term focus higher towards $1,225/27," technical analysts at Barclays Capital said in a note. Among other precious metals, silver was bid at $18.29 an ounce against $18.24, rising in line with gold. Platinum was at $1,521 an ounce against $1,519.50, while palladium was at $467 against $464.50. "Platinum and palladium, which are predominantly used for the production of autocatalyts, are currently facing some pressure," said Commerzbank in a note.
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