Gold edged lower in Europe on Thursday but interest in physical bullion as a haven from risk, as investors worry about the global economic outlook, is supporting the precious metal above $850 an ounce.
Spot gold was quoted at $850.40/852.00 an ounce at 1016 GMT, down from $854.05 an ounce late in New York on Wednesday.
Investors fretting about the prospects for other asset prices are buying coins and bars, traders said.
As in October and November, since the beginning of the week we have seen strong investor demand for physical gold, said MKS finance head of trading Afshin Nabavi.
The world’s largest bullion-backed ETF, New York’s SPDR Gold Trust, said its holdings rose to a record 805.96 tons on Wednesday.
On the supply side, the world’s fifth largest gold producer, Harmony Gold and Australia’s biggest bullion miner, Newcrest Mining, both cut their output forecasts.
For the current year, an output of 280-300,000 ounces of gold is anticipated and 17-18 million ounces of silver, said Commerzbank analyst Eugen Weinberg in a note.
Rising gold production in Russia is hardly likely to be enough, though, to compensate for the lower output in other major producing countries such as South Africa and Australia.
Gold has tracked its main external drivers, oil and the dollar, less this week as safe-haven buying sparked by fears over the global economy has taken centre stage.
Among other precious metals, silver edged down to $11.23/11.29 an ounce from $11.31 an ounce. Platinum remained broadly rangebound, building a base below $1,000 after sharp falls in the later part of 2008.
Prices plummeted from a high of $2,290 an ounce in March as investors worried about the outlook for demand from carmakers, which account for around half of global platinum consumption.
Platinum was at $924/934 an ounce, little changed from $923.50 late in New York on Wednesday, while palladium was at $182.50/186.50 an ounce, down from $183.50.—Reuters
