Gold extends winning streak to fifth week on softer equities
Gold was trading close its highest in seven weeks on Friday, poised for a fifth straight weekly climb as weaker equities burnished its safe-haven appeal.
The five-week rally - a gain of nearly 5 per cent - is the metal's longest winning streak since August-September.
After a 28-per cent dip in 2013, gold is getting a boost this year from weakness in stock markets, which on Thursday were dented by fears of a slowing economy in China. A mixed bag of U.S. corporate earnings is also hurting shares.
Gold is seen as an alternative investment to stocks.
"The U.S. stock markets (have) had an unusually sloppy January, and this may have revived interest in the precious metal," said INTL FCStones analyst Edward Meir.
"We are not sure we are ready to join the long argument just yet, although we have to admit that the technicals are looking far more positive each passing day."
Spot gold had eased 0.3 per cent to $1,260.39 an ounce by 0344 GMT, after surging more than 2 per cent on Thursday to $1,265.40 - its highest since December 10 and its biggest one-day rally in three months. Gold is up about 0.6 per cent so far this week.
Reuters technicals analyst Wang Tao said spot gold is targeting $1,282, as it has broken above resistance at $1,258.
Gold's move in the previous session was initially prompted by falling equities and news from major buyer India that the leader of the country's ruling party has asked the government to review tough import restrictions on gold.
After prices broke through key technical resistance near $1,260, gold rallied further.
Some analysts were cautious about further gains as investor outflows from gold funds continued and the possibility of additional stimulus cuts lingered with a Federal Reserve meeting scheduled for next week.
Holdings in SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 5.39 tonnes to 790.46 tonnes on Thursday - near five-year lows.
Metals consultancy Thomson Reuters GFMS said gold prices are expected to fall another 13 per cent this year due to improving global economic health.
Chinese demand eased on Friday with premiums on the Shanghai Gold Exchange falling to $9 an ounce from Thursday's $12.
Among other precious metals, platinum was also headed for its fifth straight weekly gain, bolstered by labour strikes in South Africa that have brought half the world's platinum production to a halt.
Copyright: Thomson Reuters 2014
