Gold gains as economy worries persist

Gold rose on Wednesday despite a slight drop in ETF holdings, with more poor data from the United States likely to spur buying by investors worried about the health of the global economy. But thin volume ahead of the release of US durable goods data showed the gains were driven mainly by speculators as higher prices also spurred sales of gold bars in Singapore.

Gold added $2.15 to $1,231.40 an ounce by 0530 GMT, having dropped to its weakest level in nearly two weeks around $1,210 on Tuesday before bouncing to more than $1,235 after sales of previously owned US homes took a record plunge in July. Other precious metals were mostly higher, with silver underpinned by a rise in iShares Silver Trust holdings and purchases by Indian consumers. US gold futures for December delivery were hardly changed at $1,233.1 an ounce after rising as high as $1,237.50 on Tuesday. Oil bounced from a seven-week low on Wednesday as investors looked for relief in US durable goods and oil inventory reports due later in the day, after fears of a double-dip recession intensified with dismal housing data.