BENGALURU - Gold prices nudged higher on Friday as Asian shares fell on renewed political and economic concerns including China's weak growth, with the metal on track for a third straight weekly gain.
China's economy grew 6.5 percent in the third quarter from a year earlier, its weakest pace since the global financial crisis, and missed expectations as a years-long campaign to tackle debt risks and the trade war with the United States began to bite.
Spot gold was up 0.2 percent at $1,227.41 per ounce as of 0441 GMT, and about 0.8 percent higher for the week.
U.S. gold futures were up 0.1 percent at $1,230.9 an ounce
"With Chinese equity markets continuing to drift lower, and lingering geopolitical risks such as Fed interest rate hikes, Italian budget concerns and the U.S.-China trade war, stock markets are still shaky and in no way have stabilised," said Ronan Manly, a precious metals analyst at Singapore-based dealer BullionStar.
"This overall mix should be supportive of the gold price."
Asian stocks slipped with MSCI's broadest index of Asia-Pacific shares outside Japan down 0.3 percent following China's latest GDP reading.
"People have started to see that equities are overvalued... This has led them to think that they need to park their funds in safe havens like gold, especially amid prevailing risk-averse sentiment and geo-political tensions," said Brian Lan, managing director at Singapore dealer GoldSilver Central.
Meanwhile, the European Commission said on Thursday a draft 2019 budget from Italy was in "particularly serious non-compliance" with EU rules, setting the stage for a possible unprecedented rejection of the country's fiscal plan.
"Gold is in a stronger position now than before. We are forecasting gold to end the year around $1,240 per ounce," said John Sharma, an economist with National Australia Bank.
The recent sell-off in global stock markets has boosted the appeal for gold, which is seen as a safe store of value during political and economic uncertainty, driving prices to a 2-1/2-month peak of $1,233.26 on Monday.
However, the yellow metal has declined about 10 percent from its April peak after investors preferred the dollar as the U.S.-China trade war unfolded against a background of higher U.S. interest rates.
Spot gold may retest a support at $1,217 per ounce, a break below which could cause a loss to the next support at $1,208, according to Reuters technical analyst Wang Tao.
In other precious metals, platinum rose 0.6 percent to $830.30 per ounce, but was down 0.8 percent for the week.
Palladium gained 0.7 percent to $1,078.40 per ounce and was up over 1 percent for the week. Silver was up 0.3 percent at $14.59.