LONDON - Gold was set for a third day of gains on Wednesday, fed by weakness in the dollar, ongoing Asian buying and a broader investor push into commodities that lifted platinum to 30-month highs and sent copper to a record. Strong data out of Germany, the largest euro zone economy, and a series of successful peripheral debt sales helped assuage some concern about the euro zone's finances and pushed the euro to its highest in a month against the dollar. Spot gold was up 0.2 per cent at $1,370.70 by 1024 GMT, while US gold futures were up 0.2 per cent at $1,370.50. Gold has fallen more than 3 per cent this month after investors have booked profits on the 30-percent gain of last year and funnelled their cash into risk-linked assets such as equities and industrial commodities. But with the headwind of dollar strength dying down for now, gold has been able to pare some of these losses, although many analysts believe rising interest rates and better growth figures could leave it prone to more declines in the weeks to come. "It's probably too soon to say the correction is over, because we've not seen any firm rebound, but economic data will drive the market and (there is) this question of whether the world is entering a global (monetary) tightening phase," said Mitsubishi analyst Matthew Turner. "(Gold) is lagging the other metals. I think the sharp moves in the currencies have ceased for now and (gold) is probably really trying to decide on direction." Gold's inverse correlation to the dollar index has been eroded in the past two weeks to reach its weakest since mid-December, on a one-month rolling basis, meaning that the bullion price has been moving more frequently in lockstep with the US currency. But this negative relation reasserted itself on Wednesday, with the dollar index down around 0.3 per cent, while gold edged higher. "It looks like gold is following the euro, which had a relatively strong run overnight," said Darren Heathcote, head of trading at Investec Australia, adding that the dollar weakness was expected to continue supporting gold prices.
