Gold inched up on Wednesday as the euro strengthened against the US dollar and oil rebounded, with investors also keeping an eye on the stock market amid fears of a growing recession.
Markets also digested news that US lawmakers had reached a tentative deal to bail out automakers. Analysts said this would boost market confidence and stocks, and could be supportive of gold.
Gold was trading at $776.35 an ounce, up $0.85 from New York's notional close on Tuesday.
A sell-off in equities had forced investors to ditch gold to cover losses, sending bullion to a 13-month low around $680 an ounce late in October.
A firmer euro against the dollar helped lift gold but demand from jewellers had subsided, said Ronald Leung, director of Lee Cheong Gold Dealers in Hong Kong, adding that dealers also expected book squaring as the year-end approached.
'Sentiment is neither bullish nor bearish. Fears of a recession make it bearish but I think safe-haven buying also makes it bullish,' he said.
Gold is struggling to sustain an uptrend since hitting a two-month high of $931 in early October, mainly due to weakness in oil and equities. Bullion was 25 per cent below a lifetime high of $1,030.80 struck in March, when fears of rising energy costs spurred buying.-Reuters
