A golden artefact.

London - Gold edged up towards $1,315 (R13,890) an ounce on Friday, heading for a second weekly gain, after soft US and European economic data fuelled expectations that central banks would stay committed to ultra-loose monetary policy, pushing bond yields lower.

Gains were capped, however, by easing concerns over unrest in Ukraine and signs of soft demand in China and India.

Spot gold was up 0.1 percent at $1,314.00 an ounce at 11:31 SA time, while US gold futures for December delivery were down 80 cents at $1,314.90.

Spot prices have so far held their narrowest weekly range this week since August 2007.

“The market has truly exhausted itself,” VTB Capital analyst Andrey Kryuchenkov said.

“The lack of any fresh geopolitical developments on top of a mixed set of mixed macro numbers on both sides of the Atlantic this week resulted in anaemic bullion trading.”

“The market will continue to monitor headlines from Iraq and Ukraine, but players will pay a little more attention to the US July factory gate inflation estimates and industrial output estimates in macro driven trading today,” he added.

“It will take a significant macro event ... to establish a new trend.”

European stocks rose on Friday and were on track for their biggest weekly gains since mid-February, while German Bund yields held near record lows as recent weak data increased expectations for central bank action to lift the economy.

Bullion was also helped by data on Thursday that showed the number of Americans filing new claims for unemployment benefits rose more than expected last week.

That helped push US yields lower.



Demand for gold in Asia, home of the world's main bullion consumers, was weak overnight, precious metals group MKS said in a note on Friday.

“Asia was more of the same today in the precious, signing off an exceptionally quiet week with yet another quiet session,” it said.

“Gold opened the day at $1,312 and did not deviate far from that level ... Some very light retail buying was seen, but they were the only notable flows we saw.”

The World Gold Council said in a report on Thursday that global gold demand fell 16 percent in the second quarter, with China and India between them accounting for over half of the year-on-year decline in bar and coin demand.

Persistently soft gold demand in Asia has stoked worries that buying will fail to pick up in the second half, when it is normally stronger, traders and dealers said.

Hedge fund Paulson & Co maintained its stake in the world's biggest gold-backed exchange-traded fund, SPDR Gold Trust, in the second quarter, while Soros Fund Management LLC sharply boosted its investment in gold mining stocks.

Among other metals, spot silver was up 0.7 percent at $19.91 an ounce.

The silver market enters a new era in benchmarking on Friday after a regulatory drive for more transparency in price setting brought the 117-year-old silver 'fix' to an end.

Spot platinum was up 0.1 percent at $1,458.75 an ounce, while spot palladium was up 0.2 percent at $881.90 an ounce.

Impala Platinum said on Friday its headline earnings per share would be 70-75 percent lower in the year to June 30, mainly due to a five-month strike at its Rustenburg operations. - Reuters