SINGAPORE, Jan 6 (Reuters) - Gold retained gains from a two-day rally on Wednesday, buoyed as markets shifted away from risk amid escalating tensions in the Middle East, fears of a slowdown in China and a slide in global equities.
FUNDAMENTALS
* Spot gold XAU= was little changed at $1,077.80 an ounce by 0046 GMT, after gaining 1.6 percent in the last two sessions. It reached a four-week high of $1,083.30 on Monday.
* The metal's safe-haven appeal has shone through early in the year as relations between Saudi Arabia and Iran collapsed over the weekend after the Kingdom's execution of a Shi'ite cleric, a prominent critic of Saudi policy, set off a storm of protests in Tehran. urn:newsml:reuters.com:*:nL8N14P17Z
* A rout in the equity market also prompted investors to channel money towards gold.
* Global equity markets were flat on Tuesday after their worst January kick-off in years as concerns about the Chinese economy weighed. On Monday, Chinese shares slumped 7 percent, triggering a domestic trading halt and a sharp sell-off in U.S. and European markets.
* Bullion is often seen as a alternative investment during times of geopolitical and financial uncertainty, though safe-haven rallies tend to be short-lived.
* Gold slid 10 percent last year on fears higher U.S. rates would lower demand for the non-interest-paying asset, while boosting the dollar. A stronger greenback makes dollar-denominated gold costlier for holders of other currencies.
* The Federal Reserve raised U.S. rates for the first time in nearly a decade last month. It is expected to hike rates further this year.
* The U.S. central bank's Federal Open Market Committee will release the minutes of its December policy meeting later on Wednesday. Bullion traders will be eyeing the minutes for clues about the outlook for the Fed's rate hike path.
* For the top stories on metals and other news, click TOP/MTL or GOL
MARKET NEWS
* Asian stocks were subdued early on Wednesday as floundering crude oil prices continued to dampen risk sentiment, while the dollar and yen drew support from anxiety over global growth and geopolitical risk stemming from Iran-Saudi tensions.
* Oil dropped over 2 percent towards its 11-year low on Tuesday, as traders shrugged off growing tensions between two of the world's biggest oil producers and focused instead on a stronger dollar and swelling U.S. crude inventories.
PRICES AT 0046 GMT
Metal
Last
Change Pct chg
Spot gold
1077.8
0.54
0.05 Spot silver
13.99
0.03
0.21 Spot platinum
890.7
2.3
0.26 Spot palladium
533.5 -0.81
-0.15 Comex gold
1077
-1.4
-0.13 Comex silver
13.975 0.004
0.03
COMEX gold and silver contracts show the most active months