Reuters reported that gold traded flat retaining gains from the previous 2 days, as investors looked for fresh leads from a European Union summit after shrugging off data showing China's economy slowed for a seventh quarter as expected.

European leaders will gather for 2 day meeting amid talk that Spain will seek a bailout next month as the bloc continues to struggle with its debt crisis.

Gold has closely followed moves in the currency market with improving sentiment around the euro zone giving support to the euro and weighing on the dollar making dollar priced commodities more attractive for buyers holding other currencies.

China's economy slid into its seventh straight quarter of slowdown in the July to September quarter, growing at 7.4% on the year as expected and Beijing said the country would be able to beat or exceed the annual growth target of 7.5%.

Investors expect more policy clarity from Beijing after the leadership transition next month amid speculation that China will launch more stimulus measures to help boost growth. Prices of bullion dipped to below USD 1,730 earlier in the week under the pressure of uncertainty over Spain's bailout plan and improvement in US economic data which triggered concerns about the extent of the latest stimulus measures.

Mr Chen Min an analyst at Jinrui Futures in the southern Chinese city of Shenzhen said that "In the short term, the USD 1,730 support level will continue to feel a lot of pressure as investors focus on the euro zone summit. But beyond that, gold's outlook is still bullish thanks to support from the easing measures by central banks."

Source – Reuters

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