SINGAPORE (Commodity Online) : Gold prices edged up in Asian trade Tuesday mainly on investor's buying interest after prices dropped below the psychological barrier of $1200 an ounce.

Gold for immediate delivery was seen trading at $ 1199.58 an ounce at 12.30 p.m Singapore time while U.S. gold futures for August delivery was at $ 1199.47 an ounce on the Comex in New York.

Meanwhile, holdings by the world's largest gold-backed exchange-traded fund, SPDR Gold Trust, rose for the first time since late June. Holdings rose to 1,314.819 tones as of Monday, up 0.304 tones from the previous business day.

Gold prices hit record highs in late June as concern over European sovereign debt levels and instability in the broader financial markets helped a boom in safe-haven investment. The metal has climbed 9.4 per cent this year.

The euro was little changed and well below two-month peaks against the dollar, as investors hesitated to go long on the single currency and risk large short U.S. dollar positions during the U.S. earnings season.

On Monday, gold prices dropped 1.2 per cent to close at less than $1,200 as global stocks gained amid optimism that earnings have improved and the US dollar strengthened.

Gold futures for August delivery dropped $11.10, or 0.9 per cent, to $1198.80 on the Comex in New York. Gold futures fell as the dollar's rally eroded demand for the precious metal as an alternative asset.

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