SINGAPORE: Gold held near a one-month high on Wednesday as investors weighed supportive easy monetary policies of central banks against a strengthening global economic recovery that would make riskier assets more attractive.
Recent upbeat data from the United States, China and even Europe has triggered rallies in equities and precious metals with industrial applications, including silver, platinum and palladium, putting gold in the shadow.
And the US debt ceiling talks, seen as a potential threat to the recovery of the world's top economy, have shown positive signs, as the House of Representatives plans to pass a bill on a nearly four-month extension of the borrowing limit.
"It looks like the debt ceiling problem is solved for the time being, and investors would pour money into the stock market rather than gold," said Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong.
The Standard & Poor's 500 index hit a five-year high in the previous session, up 4.6 percent so far this month, outperforming the gain of 1 percent in gold -- the smallest gainer in the precious metals complex over the same period.
Spot gold was little changed at $1,691.84 an ounce by 0716 GMT. It hit a one-month high of $1,695.76 in the previous session after the Bank of Japan announced bold stimulus measures in an attempt to revive the anaemic economy.
US gold too traded nearly flat at $1,692.10.
Gold has been trying unsuccessfully to break through the $1,700 resistance level since late last week.
Technical analysis suggested spot gold may rise to $1,706 an ounce during the day, as an upward wave c starting from the Jan. 11 low of $1,653.44 has not been completed, said Reuters market analyst Wang Tao.
Buying in the physical gold market in Asia has slowed as prices rose more than $50 from the beginning of the year, despite the upcoming Lunar New Year holidays that typically attract a lot of gold buying in China and other nations in the region.
"Typically we should see a lot of buying from China around this time of the year, but we are not," said a Singapore-based dealer, "They may have already stocked up for the holiday demand."
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