SINGAPORE (Commodity Online) : Gold prices edged higher in Asian trade Thursday, despite a dollar recovery, mainly on a drop in equities boosted its appeal as a store of value.

Prices steadied around $1,030 per ounce on Thursday, pausing their decline for now after earlier hitting a new three-week low of $1,025.75, but the topside was capped by a recovery in the dollar.
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Spot gold edged up to $1,031.60 an ounce at 11.30 a.m Singapore, up 0.5 percent from New York's notional close of $1,026.85 an ounce while U.S. gold futures for December delivery traded at $1,032.10 per ounce after falling $4.90, or 0.5 percent, to $1,030.50 on Wednesday.

Bullion gained as Asian stocks extended a global drop in equities after new-home sales fell unexpectedly in the U.S., casting doubt over the strength of the recovery there and reviving demand for safer assets.

An extended fall in higher-yielding currencies as well as in stocks, partly reflecting fears over the pace of economic recovery, suggested investors kept unwinding growth-linked trades that had been in vogue in recent months.

In the foreign exchange market, the U.S. dollar held firm near its highest in more than two weeks against a basket of currencies pulling further away from a 14-month low marked on Oct. 21.

The precious metal had been taking buying cues from fast-growing optimism over economic recovery, which fuelled inflation concerns. A steadily declining dollar also increased the allure of the precious metal as an alternative asset.

Meanwhile, SPDR Gold Trust said its holdings stood at 1,104.434 tones as of Oct 28, down 1.22 tones or 0.1 percent from the previous business day and bringing the total decline this week to 3.66 tones.

Among other precious metals, silver rose 0.4 percent to $16.22 an ounce, platinum added 0.4 percent to $1,314 an ounce and palladium jumped 1 percent to $319 an ounce.