Gold edged up on Thursday on a weaker dollar and as equities plunged on soft Chinese trade data that stoked concerns about the health of the world's No 2 economy. The bullion rose even after minutes from a US Federal Reserve meeting last month signalled that the central bank could raise interest rates in December.
"Despite the FOMC minutes that were released overnight, gold prices didn't really move. This strongly suggests that gold prices at this juncture, of $1,250, have already digested the probability of a rate hike around this year," said OCBC Bank analyst Barnabas Gan. Gan added that various headwinds to the global economy would buoy safe-haven demand for bullion, with the metal likely to touch $1,300 by the year-end.
Several voting Federal Reserve policymakers judged a rate hike would be warranted "relatively soon" if the US economy continued to strengthen but doubts on inflation remained, according to the minutes of the Fed's September policy meeting released on Wednesday. "Gold has been under pressure but we do not think the FOMC minutes will add materially to the downwards slant of the market," HSBC analyst James Steel wrote in a note. "But without further increases, some of the pressure on gold may come off." Spot gold was up 0.3 percent at $1,257.95 an ounce by 0742 GMT, while US gold futures advanced 0.5 percent to $1,259.80 an ounce.