Gold turns higher on safe-haven buying; investors shun risk

London (Jan 31)  Gold rose on safe-haven buying on Friday, yet still appeared set to snap a five-week rally as strong U.S. economic growth and weak Chinese demand undermined a rally that began in late December.

Bullion gained across most of January to this week as weakness in global equities burnished its safe-haven appeal, and on brisk purchases from top buyer China ahead of the Lunar New Year holiday, which begins today.

However, equities have now steadied after strong U.S. data reassured investors worried about capital outflows from emerging markets, and China has gone into a one-week break, leaving gold without a key support during Asian hours.

Spot gold reversed early losses as stock futures pointed sharply lower, rising 0.4 percent to $1,249 an ounce. On Thursday,the metal suffered a 2-percent drop.

Bullion is down around 2 percent for the week after five straight weeks of gains. It is up more than 3 percent for the month; January's early gains were enough to push gold to its first monthly increase in five. Among other precious metals, platinum was headed for a second weekly drop despite strikes at South African mines that have hit about 40 percent of global supply.