Gold rose on Friday, holding near a 1- month high hit the previous day as worries about a deepening U.S. economic slowdown escalated and helped push up holdings in the ETF for the third consecutive day.
The precious metal, heading for its biggest 3-week gain since mid-May, is taking cues from U.S. economic data as investors dumped equities and fled for the safety of U.S. Treasuries and bullion.
Gold rose $2.05 to $1,232.15 an ounce by 0325 GMT, having rallied to as high as $1,237.15 on Thursday after new U.S. jobless claims hit a nine-month high last week, and mid-Atlantic manufacturing slumped in August for the first time in more than a year.
I think if you see a potential downside, that would be profit taking. Next week, I think again it depends on the data that we are seeing, said Ong Yi Ling, investment analyst at Phillip Futures in Singapore.
But I would think that it's still an uptrend that I would be calling, said Ling, who pegged resistance at $1,240.
U.S. gold futures for December delivery fell $1.6 to $1,233.8 an ounce after rising as high as $1,239.50 on Thursday -- its strongest since July 1.
Cash gold and U.S. futures powered to a record in June on worries the debt crisis in Europe was spreading and the U.S. economy was slowing.
The world's largest gold-backed exchange-traded fund, SPDR Gold Trust (GLD.P), said its holdings rose to 1,299.468 tons by August 19 from 1,295.516 tons on August 18. The holdings hit a record at 1,320.436 tons on June 29.
Asian stocks slipped on Friday and the yen threatened to hit 15-year highs after the U.S. heightened worries about slackening growth in the world's largest economy.
Poor economic figures revived fears the United States may be sliding back into recession, or a double dip, and tipped investors' toward less risky havens such as gold, the yen and U.S. and Japanese government bonds.
While selling from jewelers was limited on Friday despite higher prices, dealers said gold would have to crack the early July high around $1,243 to sustain the gains.
The range is a bit too tight and it can't break through new highs. So maybe the market is waiting for a correction, but sentiment is of course is a little bit bullish, said a dealer in Hong Kong.
Oil was steady near a six-week trough below $75, after weak U.S. economic data signaled the world's top oil-consuming nation will struggle to work through the most ample petroleum inventories in two decades.