Gold edged higher for a second session on Thursday on safe-haven buying, bolstered by a weaker dollar and drops in Asian stocks after mixed U.S. economic data added to worries over Europe and China.
FUNDAMENTALS
Spot gold rose 0.3 percent to $1,254.56 an ounce by 0012 GMT, after gaining almost 1 percent on Wednesday. Comex gold rose about $2 percent to $1,253.60. U.S. private employers stepped up hiring in June and new applications for unemployment benefits fell for a second straight week last week, pointing to a steadily improving labour market picture.
Still, the pace of economic growth remains lacklustre, with other reports on Wednesday showing a slowing in activity in the service industries last month and a widening in the trade deficit in May.  The markets are eyeing U.S. nonfarm payrolls data on Friday to determine when the Federal Reserve would begin tapering its $85 billion monthly bond buying stimulus. Portugal’s 10-year bond yield shot above 8 percent and its stock market slumped 5 percent on fears a snap election could derail Lisbon’s exit next year from a bailout by the European Union and International Monetary Fund.
China’s inter-bank funding costs fell sharply on Wednesday, with key rates approaching normal levels following an unprecedented cash squeeze last month. However, caution lingered over the liquidity outlook for the coming months, especially as growing signs of an economic slowdown threaten to add to strains on the banking system and fuel more capital outflows. Gold demand in India, the world’s biggest buyer of the metal, remained lukewarm on Wednesday as a drop in the rupee lifted local prices by more than one percent amid restrictions by the central bank on gold imports.
Precious metals prices 0012 GMT

Source:Reuters
Source: Bullion Bulletin