* Doubt on economic recovery remains; ETF holdings up
* Coming up: U.S. ISM Manufacturing PMI August; 1400 GMT
By Rujun Shen and Jacqueline Wong
SHANGHAI, Sept 1 (Reuters) - Gold prices edged lower on
Wednesday as modest growth in U.S. consumer confidence and
improved home prices eased some worries of another downturn in
the United States.
Prices eased after touching a two-month high on Tuesday as
investors continued to worry about the prospects of the global
economy and sought refuge in the yellow metal.
Still, most investors attributed the fall to a
consolidation and expected prices to rise on unabated demand
due to the uncertainty surrounding global growth -- evident
from a steady increase in the holdings in the world's largest
gold-backed, exchange-traded fund.
"Gold is taking time to consolidate," said Dick Poon,
manager of precious metals at Hareaus in Hong Kong. "Even if it
dropped $20 to $30, it would still be healthy. It's likely to
test $1,300 before the year end."
Spot gold prices <XAU=> edged down 0.3 percent, or $3.19,
to $1,245.80 an ounce by 0256 GMT, easing from a two-month peak
of $1,249.90 hit on Tuesday.
The 30-day moving average, at $1,208.07, was close to
crossing above the 50-day moving average at $1,209.06.
U.S. gold futures for December delivery <GCZ0> was down 0.1
percent at $1,248.7 an ounce.
Holdings in SPDR Gold Trust <GLD.P>, rose by 3.952 tonnes
to 1,302.508 tonnes on Aug. 31, from 1,298.556 tonnes on Aug.
27.
"For whatever reason, the market decided to look on the
data as negative. Consequently we saw safe-haven buying," said
Darren Heathcote, head of trading at Investect Australia in
Sydney.
"Investors are reluctant to exit their long gold positions,
as shown in the ETF numbers. And at same time, market seems
very much focusing more negative data than positive."
Data showed modest growth in U.S. consumer confidence in
August and better-than-expected June home prices, easing some
worries on a "double-dip" in the world's largest economy.
[]
"I think there is scope for it to retrace a little if we
get positive on the stock market tonight," said Heathcote of
Investec.
Asian stocks rose on Wednesday, encouraged by a
manufacturing rebound in China and stronger-than-expected
growth in Australia. []
The official purchasing managers' index (PMI) of China in
August moved up one notch from the previous month, after three
months of slowing growth. []
The uncertainties in the economic outlook helped propel
gold to its biggest monthly rise since last November in August.
And some expected gold prices to further benefit from the
worries over recovery especially in the U.S. and Europe.
"Market move is more related to foreign currency market.
Investors are putting more money into commodities and less into
the euro, as they want to avoid risks on the foreign exchange
market," Poon said.
Poon added that physical demand has ticked up since the end
of last week from India and China, among other Asian countries.
Investors are eyeing more data from the U.S. later this
week, including the non-farm payroll figures on Friday, for
fresh signs of a weakening economy.
A researcher from China's central bank warned gold
investors and told them to be alert to possible gold price
plunges as a result of selling from overseas central banks.
[]
Precious metals prices at 0256 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 1245.80 -3.19 -0.26 13.70
Spot Silver 19.33 -0.01 -0.05 14.85
Spot Platinum 1515.25 -1.15 -0.08 3.29
Spot Palladium 498.50 1.80 +0.36 22.93
TOCOM Gold 3396.00 50.00 +1.49 4.20
25925
TOCOM Platinum 4155.00 41.00 +1.00 -5.16
9585
TOCOM Silver 52.80 1.30 +2.52 2.13
341
TOCOM Palladium 1361.00 31.00 +2.33 16.82
113
Euro/Dollar 1.2684
Dollar/Yen 84.50
TOCOM prices in yen per gram. Spot prices in $ per ounce.
(Editing by Manash Goswami)
