* Gold hits seven-week high as equities drop
* For a technical view on gold, click []
* Coming Up: U.S. NAHB housing market index Aug; 1400 GMT
(Recasts, changes dateline from SINGAPORE)
By Rebekah Curtis
LONDON, Aug 16 (Reuters) - Gold rose to its strongest in
seven weeks on Monday, boosted by its safe haven appeal as
gloomy Japanese economic data stoked investors' concerns about
the health of the global economic recovery.
Japan's economy expanded just 0.1 percent in the quarter to
June, far less than analysts had expected. Asian and European
equities fell after the data, while on Friday U.S. stocks closed
out their worst week in six. [] []
Spot gold <XAU=> rose to $1,223.65 an ounce by 0910 GMT,
having hit an intraday day high of $1,224.25 -- its highest
since July 1. Bullion struck a record around $1,264 in June.
"There are jitters about the global economic recovery, but
also the fact that we're trading comfortably above $1,200 is
prompting some interest the gold market," said Eugen Weinberg,
an analyst at Commerzbank.
"Also I would not be surprised to see more physical buying
in front of the festive season in India."
Holdings in the world's largest bullion-backed ETF, SPDR
Gold Trust, were unchanged, suggesting that some investors were
happy to hold on to bullion after recent U.S. economic data
pointed to weakness in the economy. []
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U.S. gold futures for December delivery <GCZ0> rose $9.4 to
$1,226 an ounce, extending gains from Friday when weak U.S.
economic data boosted the metal's safe have appeal.
CURRENCY CORRELATIONS
Gold resumed an inverse correlation with movements in the
dollar, which fell against the euro and other major currencies.
Recently the metal and U.S. currency had moved in the same
direction due to both being perceived as safe haven assets.
[]
"Gold's ... positive correlation with the euro resumed,
suggesting that the metal's place as the ultimate hedge against
risk remains secure," ABN AMRO said in a note.
"Especially since the outlook for the U.S. dollar remains
weak as far as the eye can see, with U.S. interest rates
likely to remain pinned to the floor well into 2011."
Oil prices rose above $75. Higher oil prices are seen as
triggering inflationary pressures, which are supportive for gold
because the metal is seen as a hedge against inflation. []
Silver <XAG=> traded at $18.20 an ounce from $18.08 an
ounce, platinum <XPT=> at $1,529.50 an ounce from $1,520 an
ounce and palladium at $476.23 an ounce from $472 an ounce.
(Additional reporting by Lewa Pardomuan; Editing by Alison
Birrane)
