By Sethuraman N R
BENGALURU (Reuters) - Gold held steady on Wednesday as bullion found little impetus from weaker equities as the dollar rose to a four-month high on the back of better-than-expected U.S. housing data.
Asian stocks eased early on Wednesday after a record run on Wall Street showed signs of petering out.
Global risk appetite, which has recovered rapidly from the Brexit shock late in June, received a sobering reminder after the International Monetary Fund cut its global growth forecasts for the next two years on Tuesday, citing uncertainty over Britain's looming exit from the EU.
Spot gold was up 0.1 percent at $1,332.81 an ounce at 0334 GMT. It closed at $1,331.73 on Tuesday.
U.S. gold was up 0.1 percent at $1,333.30 an ounce.
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"The probability of a U.S. Federal rate hike has increased as of today. Some expectations of a rate hike have come back," said OCBC Bank analyst Barnabas Gan.
"There are still some headwinds to growth and this may lift safe-haven demand should the implications of Brexit start to unwind."
Gold, which has risen 25 percent this year, is highly sensitive to rising rates, which increase the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar, in which it is priced.
"Technically, it looks like gold's recent weakness is slowly coming to a halt with a base being formed around $1,325-35," MKS analyst James Gardiner said in a note.
Spot gold is biased to fall to $1,313 per ounce after completing its consolidation within a small wedge, as per Reuters technical analyst Wang Tao.
The dollar firmed in early Asian trading on Wednesday, as strong U.S. data and rising expectations that the Bank of Japan will muster additional easing steps sent the dollar index to four-month highs. [USD/]
U.S. housing starts rose more than expected in June as construction activity increased broadly, but downward revisions to the prior months' data pointed to a sector treading water in the second quarter.
Among other precious metals, spot silver, having ended lower in the four previous sessions, was up 0.1 pct to $19.91 an ounce.
Spot platinum was down 0.4 percent at $1,084.50, while palladium, which touched an eight-and-half-month high on Tuesday, was down 0.7 percent at $651.70.
(Reporting by Nallur Sethuraman and Vijaykumar Vedala in Bengaluru; Editing by Ed Davies and Sunil Nair)