SINGAPORE (Commodity Online) : Gold remained highly volatile in Asian trade Thursday amid strong stocks while reports of drops in Chinese commodity futures fails to influence the prices.

Spot gold was seen trading at $1,256.71 an ounce by afternoon Singapore time while Gold futures for December delivery was at $1254.24 an ounce on the Comex in New York.

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Asian stocks edged up to track a small rally on Wall Street, while the euro gained after successful European bond auctions gave investors an excuse to lighten up on their bets, but worries about financial stability in Europe lingered.

Analysts said the precious yellow metal is likely to remain highly volatile during the day as a rally in equities eroded demand for the precious metal as a store of value.

Silver for immediate delivery dropped 0.7 per cent to $19.775 an ounce, after yesterday surging to the highest price since March 2008.

Platinum and palladium were little changed at $1,554.50 an ounce and $523 an ounce respectively.

The metal yesterday climbed to as high as $US1262.45, 0.2 per cent from the all-time high reached in June. It hit $1,264 an ounce in June.

Bullion has jumped 14 per cent this year and is set for a 10th annual gain as investors seek protection against financial turmoil in Europe and the prospect of slowing economic growth.

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