(Reuters) - Gold rose for a second day in a row on Thursday as a decline in the dollar ahead of a key G20 meeting helped offset what analysts said was a temporary dip in investor demand for bullion.
Data showing a decline in imports of platinum and palladium into Switzerland, one of Europe's major clearing hubs for platinum group metals, in September had little impact on prices for the metals, which rose in line with the commodities complex.
Holdings of gold in the world's largest exchange-traded fund, the SPDR Gold Trust, fell for a fourth consecutive occasion, indicating a decline in investment appetite.
Meanwhile, speculation swirled in financial markets over a possible bargain by the Group of 20 countries to rebalance the global economy.
Finance and central bank chiefs meet on Friday in Gyeongju, South Korea to discuss a common path on managing currency, trade and economic imbalances ahead of a G20 summit meeting in Seoul next month.
Spot gold hit a high of $1,349.05 an ounce before slipping to $1,346.56 by 1115 GMT (7:15 a.m. EDT), down from $1,343.50 at New York's notional close. Prices rose by nearly 1 percent on Wednesday following reports the Federal Reserve would buy bonds to inject money into the U.S. economy.
U.S. gold futures for December delivery were up $3.0 an ounce at $1,347.10.
"Despite the renewed dollar weakness, we've been struggling to regain traction to the upside. There have been a lot of investors going into gold already and probably at this juncture, would probably be a little hesitant, because now everyone is focusing on currency moves and the outcome of what could happen at the weekend," said Ole Hansen, a senior manager at Saxo Bank.
"The trend is still firmly pointing toward higher prices and that really is the main message still."
SPDR said its holdings eased to 1,299.177 tonnes by Oct 20 from 1,300.089 tonnes on Oct 19. The holdings hit a record at 1,320.436 tonnes on June 29.
DOLLAR TILTS LOWER
The dollar fell against the euro as investors bought up the single European currency in the belief that interest rate differentials will widen to the detriment of the greenback.
Gold benefits from dollar weakness, firstly as it becomes cheaper to non-U.S. buyers, but also profits from any investor nervousness stemming from declines in the greenback.
The strength in the dollar in the past week has stripped more than 3 percent off the gold price since it hit a record high just above $1,387 last week.
Gold also shed nearly 3 percent on Tuesday in its largest one-day fall since July following China's surprise announcement of an interest rate rise.
