* Market needs fresh impetus to climb higher, traders say
* More central bank demand expected after Bangladesh buy
(Updates prices and comments)
By Humeyra Pamuk
LONDON, Sept 10 (Reuters) - Gold held steady below $1,250 on
Friday as a lack of fresh investment demand balanced against
investors' lingering worries about the global economy.
Spot gold <XAU=> was at $1,249.80 an ounce by 1514 GMT, less
than $20 away from an all-time high above $1,264 an ounce struck
in June, versus Thursday's $1,248.27 an ounce. It fell to a
session low of $1,236.55 an ounce.
Bullion earlier this week touched its highest in two months
above $1,262 an ounce on renewed worries about the European
banking sector but it gave up some gains after upbeat economic
data on Thursday soothed some investor fears. []
[]
"There hasn't been enough genuine demand around," said Simon
Weeks, head of precious metals at the Bank of Nova Scotia. "The
ETF's are struggling to gain any decent investment, and the
physical market's gone quiet."
In the near term a range between $1,225 and $1,245 an ounce
may be possible, he added. "It was more of a question of being
up there on sentiment rather than demand, and the market's not
been able to sustain it."
The world's largest gold-backed exchange-traded fund, SPDR
Gold Trust <GLD.P>, said its holdings slipped to 1,293.531
tonnes by Sept. 9 from 1,294.442 tonnes by Sept 3. The holdings
hit a record at 1,320.436 tonnes on June 29. []
Gold jewellery sales in Italy, the European Union's top
market by consumption, fell 23.5 percent in the second quarter
and are likely to fall 18 percent for the full year, a World
Gold Council official said on Friday. []
Bullion did not see much support from the currency markets,
where the dollar <.DXY> was slightly higher in volatile trade,
making bullion more expensive for non-U.S. currency holders.
[]
UPWARD TREND IN PLACE
Many analysts are still betting on gold's safe-haven appeal
to remain due to lingering worries surrounding the health of the
global economy. On Friday, European shares retreated from
four-month highs. []
"The upward trend is still very much in place. We have seen
marginal improvement in risk appetite, but worries about
European sovereign debt ... that's kept investors cautious,"
said analyst Daniel Brebner at Deutsche Bank.
"It's just a matter of time before we hit $1,300 an ounce,"
he added. [] []
U.S. gold futures for December delivery <GCZ0> were down
$1.4 at $1,249.5 an ounce. The all-time high on the December
futures chart sits at $1,270.60 per ounce. []
Interest from Asian central banks in bullion is another
factor that could support prices in the long-term, analysts
said, after the International Monetary Fund said it sold 10
tonnes of gold to the central bank of Bangladesh this week.
Industry experts expect more central banks to follow.
"Gold is one of the few asset classes that is almost
universally permissible by the investment guidelines of emerging
countries' central banks," said Natalie Dempster, director,
government affairs at the World Gold Council.
Spot silver <XAG=> was at $19.94 an ounce from $19.79 late
in New York on Thursday. It touched $20.14 an ounce earlier this
week, its highest since March 2008.
Deutsche Bank analysts said silver could outperform the
precious metals complex.
"Given our conviction that central bankers will lean heavily
towards an inflationary outcome rather than deflationary, we
expect that precious metals such as silver or palladium could
outperform in a precious metals context."
Palladium <XPD=> was at $516.98 an ounce versus $518.73 an
ounce, while platinum <XPT=> was at $1,543 an ounce compared
with Thursday's $1,548.28 an ounce.
(Additional reporting by Lewa Pardomuan in SINGAPORE; editing
by Alison Birrane and Jane Baird)
