London: Gold held broadly steady Wednesday, taking cues from a softer dollar while consolidating a recent run to 1-1/2 month highs, with positive sentiment seen broadly intact as prices managed to hold above $1,220 (Dh4,477) an ounce.
Spot gold stood at $1,222.65 per ounce by 0933 GMT, compared with $1,222.90 late in New York on Tuesday. US gold futures for December delivery fell $4.50 to $1,223.70 per ounce.
The dollar was about 0.1 per cent lower against a basket of major currencies but the euro had struggled earlier as concerns about debt in the single currency zone persisted.
"Gold is pretty much stuck in a range. From time to time we're seeing physical buying and safe-haven buying in turn, but we'll probably stay in this range," Commerzbank senior trader Michael Kempinski said.
The market could remain broadly between $1,200 and $1,250 per ounce, having hit its highest since July 1 on Tuesday at $1,228.45 per ounce.
In wider markets, world stocks dipped, dragged down by losses in Europe. Shares of global miner BHP Billiton remained in focus, falling on concerns that it may have to overpay for fertiliser group Potash Corp after the Canadian company rejected an initial offer.
Asia-based dealers said earlier a positive outlook for gold was underpinned by a rise in ETF holdings and nagging worries about the health of the global economy.
"I am also looking at gold to be supported above the $1,220 level. It would be underpinned by strong investment demand as we see from the rise in holdings of the SPDR Gold Trust," said Ong Yi Ling, an investment analyst at Phillip Futures in Singapore.
"I think it really demonstrates a strong investment interest in gold that will continue, especially if we see people worried about the economic recovery. It really depends on the kind of economic data that is being printed."
The world's largest gold-backed exchange-traded fund, SPDR Gold Trust, said its holdings rose to 1,294.604 tonnes by August 17 from 1,286.699 tonnes on August 12. Holdings hit a record at 1,320.436 tonnes on June 29.
Fears about a double-dip recession after a flurry of weak economic data and the Fed's downward reassessment of its US outlook lifted gold's appeal as an alternative investment.
