October 21, 2014 / 4:41 AM / 5 years ago

PRECIOUS-Gold ticks up near one-month high on slowing China growth

* China Q3 economic growth slows to 7.3 pct from 7.5 pct in
Q2
    * China data positive for gold despite uptick in Asian
equities
    * Indian festival buying supports; drop in SPDR holdings may
weigh

 (Updates prices)
    By A. Ananthalakshmi
    SINGAPORE, Oct 21 (Reuters) - Gold added to overnight gains
on Tuesday to climb to a one-month high as worries persisted
over a slowdown in the global economy after China's growth eased
in the third quarter to its weakest since the 2008/09 financial
crisis.
    The weakness in Chinese growth, however, was not as bad as
feared as the world's second-largest economy grew 7.3 percent
between July and September from a year earlier, above the 7.2
percent forecast by analysts. That is down from a 7.5 percent
growth in the second quarter. 
    Asian shares languished after giving up small gains on
Tuesday, while the U.S. dollar struggled to gain traction and
retreated against the yen. 
    "For the moment I think gold will hold near the key $1,250
level and a strong break above that could take it up to $1,275,"
said a trader in Hong Kong. 
    "Despite the recent rebound in equities, there are still
some worries out there that could attract bids for gold.
Weakness in the dollar is a major factor for gold," the trader
said.
    Spot gold rose to $1,250.20 an ounce, matching a
Sept. 11 high, before paring some gains to trade up 0.3 percent
at $1,249.40 an ounce by 0638 GMT. It gained 0.7 percent in the
previous session. 
    With China data out of the way, focus will now turn to
Wednesday's U.S. inflation data and Thursday's European
manufacturing reports.
    Weak data from Europe in particular had hurt financial
markets in recent days, leading to jitters about a global
slowdown and a close watch on economic data.
    SPDR Gold Trust, the world's largest gold-backed
exchange-traded fund, said its holdings fell 1.18 percent to
751.97 tonnes on Monday - the biggest daily percentage drop in a
year. 
    The drop in holdings at the fund - considered influential
due to its size - could undermine sentiment in the bullion
market. 
    Traders, however, were optimistic about buying interest in
the physical markets from Asia - the top consuming region.
    India, the second-biggest gold buyer, celebrates Dhanteras
on Tuesday and Diwali later in the week. Both are considered
auspicious for buying gold, and retail sales and imports could
get a boost. 
    News that India's central bank will not tighten its gold
import rules further could also lend support. 
    
    PRICES AT 0638 GMT
 Metal            Last      Change   Pct chg
                                     
 Spot gold         1249.40      3.3     0.26
 Spot silver         17.48      0.1     0.58
 Spot platinum     1267.25     8.45     0.67
 Spot palladium     761.70      1.7     0.22
 Comex gold        1249.90      5.2     0.42
 Comex silver       17.475    0.121      0.7
 Euro                1.283                  
 DXY                84.775                  
                                     
 COMEX gold and silver contracts show the
 most active months
 
 (Editing by Richard Pullin, Muralikumar Anantharaman and Biju
Dwarakanath)
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