SINGAPORE: Gold held on to small overnight gains on Thursday, as sluggish US retail sales data and geopolitical tensions boosted the metal's safe-haven appeal, although higher stock markets could check any further rise.
Asian shares rose despite a flood of soft economic data as investors wagered on more stimulus from major central banks, sending bond yields tumbling across the globe.
Spot gold was steady at $1,312.51 an ounce by 0325 GMT, after gaining 0.3 percent in the previous session. US gold slipped 50 cents to $1,314.
"Despite gold's move higher, prices remained stuck in a tight $20 trading range between $1,305-$1,325," HSBC analysts said in a note. "Barring any new geopolitical developments, bullion prices are likely to trade sideways in the near-term."
Data on Wednesday showed US retail sales unexpectedly stalled in July, pointing to a loss of momentum in the economy early in the third quarter.
This eased some investor fears that the Federal Reserve will raise interest rates sooner than expected. Other data showing an economic contraction in Japan and a shock fall in Chinese loans helped to make any tightening in monetary policy by global central banks seem a very distant prospect.
Gold has risen about 9 percent this year largely on geopolitical tensions. In recent days, a lack of a sharp escalation in some global conflicts has eased investor fears in the equity markets, threatening to weaken gold prices.
In a reflection of investor sentiment, holdings in SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.26 tonnes to 795.60 tonnes on Wednesday.
Investors were watching developments in Ukraine, as a Russian aid convoy was advancing towards its border. Kiev and Western capitals suspect the convoy could turn into a covert military action to help pro-Russia separatists.
In the Middle East, Israel and the Palestinians renewed a truce that had largely tempered a five-week-old war, but the deal got off to a shaky start on Thursday with rockets from Gaza slamming into Israel and Israel retaliating with air strikes.
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