Gold rose back above $1,210 an ounce on Friday as a stock market rally showed signs of running out of steam, pointing to persistent jitters among investors, with buyers also attracted by the metal's dip to six-week lows.
Spot gold touched a high of $1,211.10 an ounce and was bid at $1,207.25 an ounce at 1331 GMT, against $1,196.48 late in New York on Thursday. U.S. gold futures for August delivery firmed $11.20 to $1,207.30.
The metal has recovered after falling to its lowest since late May on Wednesday at just above $1,185 an ounce, but struggled to make new headway in early trade as appetite for nominally higher-risk assets like equities returned.
This risk appetite later seemed to be abating, as Wall Street stocks opened a touch lower and industrial commodities like oil pared earlier gains.
The overall picture I think still points to cautiousness, which is positive for gold, said David Wilson, an analyst at Societe Generale.
U.S. stocks opened slightly lower on Wall Street on Friday. European shares rose for a fourth session, lifted by soothing U.S. jobless and retail sales numbers, but analysts said the relief rally may not last much longer. .EU .N
On the currency markets, the euro slipped off two-month highs against the dollar, with investors taking profits ahead of the weekend as strategists said its recent rally would peter out due to lingering worries about the euro zone economy.
Industrial commodities pared earlier gains, meanwhile, with oil steadying above $75 a barrel and copper retreating from session highs at $6,740 a tonne.
ETF HOLDINGS RETREAT
Meanwhile holdings of the world's largest gold-backed exchange-traded fund, New York's SPDR Gold Trust, slipped again on Thursday, dipping 0.445 tonnes to 1,316.036 tonnes.
The fund's holdings have retreated 4.4 tonnes from the record 1,320.436 tonnes they stood at in late June, as the safe haven-related inflows seen in recent months dried up.
Elsewhere, lower prices tempted some buyers back to the market, with jewelers taking advantage of gold's recent price correction to restock.
Although we have entered a seasonally weak period for gold retail demand, wholesale buyers have taken the opportunity to buy upon dips, although not aggressively, Barclays Capital said in a note.
We do expect continued investor interest in gold to drive prices higher as the year unfolds, however near term long liquidation given elevated speculative length could cap upward momentum in the seasonally softer summer months.
Among the more industrial precious metals, silver prices firmed slightly in line with gold, bid at $18.01 an ounce against $17.89 late in New York on Thursday.
Holdings of the largest silver-backed ETF, the iShares Silver Trust, have also dropped just over 25 tonnes since the end of June to 9,151.78 tonnes.
Platinum was at $1,519.50 an ounce against $1,517, while palladium was at $449.28 against $445.50.
Buying interest overnight and in Asia has seen platinum recoup yesterday's weakness, as has palladium, said James Moore, an analyst at TheBullionDesk.com, in a note.
Short-term we expect further direction from broader industrial commodity sentiment while favorable fundamentals will provide ongoing background support, he added.
(Reporting by Jan Harvey; Editing by Anthony Barker)