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PRECIOUS-Gold firm on safe-haven demand as stocks face headwinds

Published 11/01/2016, 06:40 pm
Updated 11/01/2016, 06:50 pm
© Reuters. PRECIOUS-Gold firm on safe-haven demand as stocks face headwinds
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* Gold firms, trades close to Friday's 9-week top

* Asia shares fall sharply amid China confusion (Updates prices)

By Naveen Thukral

SINGAPORE, Jan 11 (Reuters) - Gold edged higher on Monday, trading close to last session's nine-week high as pressure on Asian stock markets supported safe-haven bids for the metal.

Asian shares sank to their lowest in over four years as doubts mounted about Beijing's ability to manage the world's second-biggest economy. MKTS/GLOB

Spot gold XAU= rose 0.1 percent to $1,105.30 an ounce by 0725 GMT. U.S. gold GCcv1 gained 0.7 percent to $1,105.40.

"We have some supportive factors in the market such as Saudi Arabia-Iran tensions, devaluation of yuan, which have prompted safe have appeal of gold," said Ronald Leung, chief dealer at Lee Cheong Gold Dealers Ltd in Hong Kong.

Gold climbed to its highest since early November on Friday, adding more than 4 percent to its value this year, on concerns over the Chinese economy and tumbling stock markets.

Perceived missteps by China's authorities in controlling their share market and currency have led to concerns Beijing might lose its grip on economic policy too.

China will face great difficulty in achieving economic growth above 6.5 percent over the 2016-2020 period due to slowing global demand and rising labour costs at home, the China Securities Journal quoted a top state adviser as saying. appetite for bullion showed signs of picking up last week. Holdings of the world's largest gold-backed exchange-traded fund, New York-listed SPDR Gold Shares (N:GLD), rose 4.2 tonnes on Thursday, data from the fund showed.

Bullion is often seen as an alternative investment during times of financial uncertainty, although 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.

Silver XAG= rose 0.3 percent at $13.978 an ounce, while platinum XPT= lost 0.4 percent at $871.53 an ounce. Palladium XPD= was down 1.7 percent to $486.75 an ounce.

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