Gold bounced on Thursday on bargain hunting after a drop the previous day, but a firmer dollar was likely to cap gains, while falling stock markets could prompt investors to sell bullion to cover losses. Weaker equities and worries about the health of the global economy sparked selling in platinum to its lowest since July 22, with sister metal palladium tumbling around 4 percent in thin trade.
Gold added $1.75 an ounce to $1,198.75 an ounce by 0534 GMT, still hovering below the closely-watched 50-day moving average. It briefly crossed $1,200 on Thursday but bullion was well below a lifetime high around $1,264 struck in June. US gold futures for December delivery rose $1.7 to $1,200.9 an ounce. The world's largest gold-backed exchange-traded fund, SPDR Gold Trust, said its holdings rose to 1,285.787 tonnes by August 11 from 1,282.746 tonnes on August 5. The holdings hit a record at 1,320.436 tonnes on June 29.