Gold steadied above $1,240 an ounce on Thursday as Asian stock markets weakened, but caution prevailed as the dollar hovered near one-week highs and outflows from bullion funds continued. "There are still concerns over a global slowdown but the recent gold rally seems to be losing momentum as the dollar is gaining some strength," said a Hong Kong-based precious metals trader. "People are waiting for more US data this week to see how the dollar performs."
Spot gold ticked up 0.2 percent to $1,243.40 an ounce by 0636 GMT, after losing 0.7 percent in the previous session. Wednesday's loss took gold away from a six-week high of $1,255.20 hit earlier in the week when fears mounted over an economic slowdown across China, Europe and the United States.
Any slowdown could send investors scuttling to gold, often seen as a safe-haven asset compared with riskier assets such as equities. But a drop in gold holdings by SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, despite the lingering growth fears has been a concern.