Gold prices edged higher on Wednesday as the dollar wilted after US data showed the US economy slowed slightly more than initially expected in the first quarter while political uncertainty lingered in Italy. US gross domestic product increased at a 2.2 percent annual rate, the Commerce Department said in its second estimate of first-quarter GDP, instead of the previously reported 2.3 percent pace.
The news knocked the dollar lower against a basket of leading currencies, away from near 6-1/2 month highs. A weaker greenback makes dollar-denominated gold cheaper for holders of other currencies. "This has supported the EUR/USD exchange rate, which in turn has underpinned the price of the positively-correlating yellow precious metal," said Forex.com analyst Fawad Razaqzada.
Spot gold was up 0.32 percent at $1,302.17 per ounce by 1:32 p.m. EDT (1732 GMT), while US gold futures for June delivery settled up $2.50, or 0.2 percent, at $1,301.50 per ounce.
Though gold prices edged higher, easing concerns of political strife in Italy dented the appeal for safe haven gold purchases, said Rob Haworth, senior investment strategist for US Bank Wealth Management.
"Today we're still following the dollar and gold will probably be under pressure if Italian politics sorts itself out over the next day or two," Haworth said.
Meanwhile, spot silver was up 0.9 percent at $16.53 an ounce.
Platinum rose 0.5 percent at $908.60 an ounce, while palladium gained 0.2 percent at $981.22.
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