* Gold has gained 5 pct in January
* U.S. fourth-quarter GDP rises at a 0.7 percent rate
(Adds comment, NEW YORK dateline; updates prices)
By Marcy Nicholson and Clara Denina
NEW YORK/LONDON, Jan 29 Gold edged higher on
Friday after U.S. data showed economic growth braked sharply in
the fourth quarter and the price of the precious metal was on
track for its biggest monthly rise in a year after global
economic headwinds hit riskier assets.
The metal has risen more than 5 percent in January,
underpinned by concerns over the world's growth outlook,
especially China, which has raised questions about the pace of
interest rate rises in the United States.
"Maybe things won't be this bad next month in the wider
markets, so it is possible that if ETF flows are subsiding,
prices will be lower too," Macquarie analyst Matthew Turner
"But one positive lesson we can learn from this month is
that gold does still have a safe-haven role and that could stand
it in good stead through a testing year to come."
Spot gold was up 0.2 percent at $1,116.46 an ounce at
2:51 p.m. EST (1951 GMT), while U.S. gold for February delivery
settled up 0.1 percent at $1,116.40 an ounce.
Global equities jumped and the yen slumped after the Bank of
Japan stunned markets by adopting negative interest rates, while
hopes the U.S. Federal Reserve will slow the pace of future rate
hikes also underpinned stock gains and supported gold prices.
"The probability, according to futures, of a Fed rate hike
in March is less than 20 percent," said George Gero, precious
metals strategist for RBC Capital Markets in New York, adding
that the weak 10-year U.S. Treasury yield was also supportive to
Gold reached a 12-week high of $1,127.80 on Wednesday, after
the Federal Reserve said it was closely watching the global
economy and financial markets. This supported the view that U.S.
policymakers may not be able to raise interest rates again as
soon as March.
"On the upside, I would look for $1,150, while there seems
to be some support at $1,100, especially after the more dovish
tone of the Fed this week," MKS SA head of trading Afshin Nabavi
The market largely shrugged off comment by Dallas Fed
President Robert Kaplan, who said the Fed will be patient about
The dollar's ascent accelerated after the release of
the U.S. gross domestic product report, which was in line with
economists' expectations, but showing a decline.
Spot silver was up 0.4 percent at $14.28 an ounce,
while spot platinum rose 0.5 percent to $864.91 an ounce
and palladium gained 1.1 percent to $495.19.
(Additional reporting by Manolo Serapio Jr. in Manila; Editing
by Susan Fenton and Lisa Shumaker)