(Updates prices, adds comments and chart)
* Inflows to gold funds show positive sentiment - analyst
* Dollar index near one-week high
* Silver and platinum slip to lowest in a week
By Sumita Layek and Arpan VargheseBENGALURU, Oct 18 (Reuters) - Gold edged higher on Thursday,supported by an improved technical outlook that helped the metalhold out against a stronger dollar.
Spot gold rose 0.1 percent to $1,223.40 an ounce at1322 GMT. U.S. gold futures were down 0.1 percent at$1,226.40."Overall, we have been technically breaking above theprevious highs, so it will be difficult for gold prices to movebelow that," said ABN AMRO analyst Georgette Boele.Monday's global stock market sell-off has added appeal togold, helping the metal to a two-and-a-half-month peak of$1,233.26.
Gold has also been testing resistance near the 100-daymoving average, around $1,226, with some analysts saying a breakabove that level could trigger further gains and put pressure onshort-sellers."The ones getting squeezed now are the shorts," Beole said.The dollar index held near a one-week high after the U.S.Federal Reserve minutes from the last meeting reiterated ahawkish stance on monetary policy, normally a bearish signal forgold."Gold is taking bit of a pause partly because of the hawkishFed minutes," ETF Securities analyst Nitesh Shah said, but hesaid many investors had been "re-engaging with the metal"."We have seen strong inflows in exchange traded funds (ETF)in the last weeks that sort of indicate investor sentiment isturning now for the metal, moving to the positive side."
Holdings of the SPDR Gold Trust , the largestgold-backed ETF, have gained more than 2 percent since Oct. 3."Geopolitical and macroeconomic factors are still notindicating exuberance and risk appetite returning to marketswith full throttle," said Religare Securities analyst SugandhaSachdeva.
Trade war concerns, a hawkish Fed and tensions between theUnited States and Saudi Arabia are seen weighing on appetite forriskier assets. This bodes well for gold as a hedge againstmarket volatility and a portfolio diversifier, Sachdeva added. In other metals, silver fell 0.4 percent to $14.55 anounce, having earlier touched its lowest since Oct. 11 at$14.41.
Platinum was down 0.4 percent at $827.80 afterhitting a one-week low of $822.50, while palladium gained0.4 percent to $1,073.50.<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^Spot gold versus the U.S. dollar ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Reporting by Sumita Layek and Arpan Varghese in BengaluruAdditional reporting by Vijaykumar VedalaEditing by David Goodman and Edmund Blair)
(If within U.S. call 651-848-5832 ); Reuters Messaging:arpan.varghese.thomsonreuters.com@reuters.net)) Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.