London - Gold prices steadied on Friday, paring earlier losses as stock markets slipped lower on both sides of the Atlantic, and remained on track to end the month with a small gain.
Investors remain on edge over tensions between Russia and Ukraine after Ukraine said on Thursday that Russia had moved troops into the country.
However, the impact of the escalating conflict has not been enough to sustain gold price increases.
Spot gold was flat at $1,289.46 (R13,720) an ounce at 16:29 SA time, while US gold futures for December delivery were up 40 cents an ounce at $1,290.80.
Prices are up 0.6 percent this month, having recovered after falling briefly to a two-month low at $1,273.06 last week.
Spot prices have traded in a range of less than $50 in August, their narrowest spread in five years.
“(Gold) has not been able to determine what theme to latch onto,” Saxo Bank's head of commodities research Ole Hansen said. “Activity remains subdued as a result.”
“The ECB meeting and US job report (next week) may jolt it back to life, but currently it's on life support, having clocked the smallest weekly range in two months.”
The euro lifted off lows and European shares sagged on Friday as a new five-year low in euro zone inflation was viewed as not extreme enough to drive the European Central Bank back into its increasingly bare policy cupboard.
A recent run of positive US data has fuelled speculation the Federal Reserve will further pare its gold-friendly monetary stimulus measures, removing support from the precious metal.
US consumer sentiment rose in August, while an index of current economic conditions hit its highest since July 2007, a survey released on Friday showed.
BUYING INTEREST SUBSIDES
The physical market in Asia saw purchases from jewellery makers this week, but buying interest began to subside as prices improved slightly.
Premiums to spot London prices for gold bars in Hong Kong stood at 80 cents to $1.10, and at 80 cents to $1.00 in Singapore.
In Tokyo, gold bars were on par with London prices.
“It's the summer season and it's normally very quiet. Dollar-priced gold is also increasing. I can't see buying or selling at the moment,” said a physical dealer in Tokyo.
Net gold flows into China from Hong Kong dropped to 22.107 tonnes in July versus 40.543 tonnes in June, the lowest in three years, data showed on Monday.
“Downside risk remains for gold over the next few months as Chinese physical demand remains on the sidelines,” ANZ said in a report.
“As demand from China remains lacklustre, a further move lower in prices will be required to stoke interest from the key consumer. We expect China to import, through Hong Kong, 750-800 tonnes of gold in 2014, down from 1,158 tonnes last year.”
Silver was down 0.1 percent at $19.54 an ounce, while spot platinum edged 0.2 percent higher to $1,423.24 an ounce and spot palladium rose by 0.6 percent to $897.97 an ounce. - Reuters