* Gold rebounds on concerns over China’s economic growth
* Analyst bearish on gold over U.S. interest rate increase (Adds detail quotes)
SINGAPORE, Jan 12 (Reuters) - Gold edged higher on Tuesday, snapping two sessions of decline, as concerns over China’s economic growth and pressure on stock markets rekindled the safe-haven status of the precious metal.
Asian shares hovered near four-year lows and oil prices languished close to 12-year lows as investors fretted over whether Beijing may be losing control of its economy.
Spot gold firmed 0.2 percent to $1,096.4 an ounce by 0218 GMT, while U.S. gold futures were little changed at $1,096.1.
“For gold, I’m looking for a bearish case at $950 an ounce, driven by higher Fed fund rate to 1.25-1.5 percent and overall dollar strength,” said OCBC Bank analyst Barnabas Gan.
“Still, gold behaves like a safe haven at this juncture given risk aversion on Chinese equity markets and low oil prices.”
China’s main stock indexes each dropped more than 5 percent on Monday. Oil prices have fallen to new 12-year lows, as concerns over China hurt commodity prices broadly.
Right from the beginning of 2016, markets have been rocked by plunges in Chinese stocks, the yuan’s fall and subsequent heavy intervention by the Chinese authorities.
The chaotic moves have led to worries China’s economy may be in for tough time rather than stabilising as some had hoped.
China is the world’s biggest consumer of gold at around 1,000 tonnes a year.
The yellow metal is often seen as an alternative investment during times of financial uncertainty, although safe-haven rallies tend to be short-lived.
The gain in gold prices is likely to be capped by concerns that higher U.S. rates would lower demand for the non-interest-paying asset, while boosting the dollar. The Fed raised rates in December and attention has shifted to how many hikes will follow in 2016.
Atlanta Federal Reserve Bank President Dennis Lockhart said there may not be enough fresh data on inflation to support another U.S. rate hike by March.
Holdings of the world’s largest gold-backed exchange-traded fund, New York-listed SPDR Gold Shares, rose 0.69 percent on Friday, data from the fund showed.
Silver dipped 0.1 percent at $13.87 an ounce, while platinum lost 1.2 percent at $834.49 an ounce. Palladium was down 2.6 percent to $467 an ounce. (Reporting by Naveen Thukral; Editing by Ed Davies)
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