Gold rose above $1,190 an ounce in Europe on Wednesday, benefiting from softer appetite for assets such as stocks and hopes for a rise in Asian demand, though an ongoing dearth of safe-haven demand capped gains.

Spot gold rose to a high of $1,197.05 an ounce, its strongest since July 23, and was bid at $1,194.95 an ounce at 5:37 a.m. ET versus $1,185.35 late in New York on Tuesday. U.S. gold futures for December delivery rose $9.60 to $1,197.10.

The precious metal has lost much of the support based on concerns over economic growth and fiscal stability that drove it to record highs earlier this year. Other factors are now emerging to support gold after its dip, however.

The initial impetus of safe-haven buying of gold has faded away, said Standard Chartered analyst Daniel Smith. We are slowly moving to other drivers.

Ultimately we are going to see more portfolio money coming into gold, he added. We could see consolidation in the short term, but ultimately on a one to three month view we are going higher.

Concerns over the pace of the recovery in the United States knocked equities on Wednesday, with European shares falling more than 1 percent. The MSCI world equity index .MIWD00000PUS also fell 0.5 percent. .EU

Weak U.S. consumer spending and housing data in recent days have fueled speculation the U.S. Federal Reserve may further loosen monetary policy at its August 10 meeting. This may benefit for gold, which tends to benefit from a looser economic policy.

On the currency markets, the dollar fell to a 15-year low against the yen, but managed to rise against the euro and versus a basket of currencies.

Among other commodities, oil prices slipped 0.8 percent as a rally that lifted prices to three-month highs near $83 a day earlier lost steam, while industry data showed U.S. gasoline stockpiles rose unexpectedly last week.


The gold market also continued to take support from news that China had taken steps to liberalize its gold trade.

China said on Tuesday it will allow more domestic banks to export and import gold as part of steps to encourage more liquid trade, which could underpin the country's growing private demand for the metal.

The international gold market is now paying a lot more attention to China's gold demand, not just from an official reserve asset perspective, but also private demand, UBS analyst Edel Tully wrote in a note.

Behind India, China is the second-largest physical consumer, she added. Therefore any step to integrate, liberalize, and expand this market should, in time, foster a rising appetite for gold.

Gold's rise this week has made technical analysts slightly more positive toward the metal, although they remain cautious until a clearer trend emerges.

Daily momentum oscillators are turning bullish, but given the significant decline in the dollar, recent price gains have been lackluster to say the least, said Barclays Capital in a note.

As such, for the time being we are maintaining our bearish bias, but the confidence in this view is falling sharply. Indeed a closing break of the 21-day (now $1,190) would move us to a neutral bias as a choppy range unfolds.

Elsewhere platinum was at $1,583.45 an ounce versus $1,576.50 and palladium at $497.48 against $498.35.

The metals are chiefly consumed by the car industry for use in autocatalysts. Data released on Tuesday showed U.S. auto sales rose 5 percent in July in an uneven recovery. The rise was the smallest in percentage terms since November.

Silver was at $18.52 an ounce against $18.42.

(Reporting by Jan Harvey; Editing by Alison Birrane)