Gold rose slightly on Wednesday after US growth data came in weaker than expected, hitting the dollar, but bullion's failure to extend gains suggested some investors were taking profits after prices hit a two-month high in the previous session, traders said. The yellow metal's appeal as a hedge increased after data showed the US economy contracted at a much steeper pace in the first quarter than previously estimated, turning in one of its worst-ever non-recession performances.
Gold has gained almost 4 percent in the last four sessions to Tuesday's two-month high at $1,325.90. Bullion prices rose on fears the Iraq conflict could escalate and a perceived lack of commitment by the Federal Reserve to raise interest rates, triggering a heavy bout of short covering.
Spot gold was up 0.2 percent at $1,319.85 an ounce by 3:01 pm EDT (1901 GMT). US COMEX gold futures for August delivery settled up $1.30 an ounce at $1,322.60, with trading volume about 10 percent below its 30-day average, preliminary Reuters data showed. Silver was up 0.4 percent at $20.95 an ounce. Spot platinum edged up 0.2 percent to $1,466.25 an ounce, while spot palladium climbed 0.3 percent to $829 an ounce.
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