By Manolo Serapio Jr
MANILA (Reuters) - Gold scaled higher on Friday, moving further away from a four-month low, as the euro rose on signs of progress in debt-hit Greece's efforts to secure fresh funding.
But weak physical demand in top consumers China and India capped price gains, with gold still sold in India at a discount to the global benchmark.
"Gold may remain weak in the near term at least until physical buyers resurface, in our view," said HSBC analyst James Steel.Spot gold was up 0.3 percent at $1,162.71 an ounce by 0629 GMT. Prices are still down marginally for the week, after touching $1,146.75 on Wednesday, its lowest since March 18.
U.S. gold for August delivery gained 0.2 percent at $1,161.80 an ounce.
The Greek government sent a package of reform proposals to its euro zone creditors on Thursday in a race to win new funds to avert bankruptcy and will seek a parliamentary vote on Friday to endorse immediate actions.
The euro climbed against the dollar on the news, making dollar-denominated assets such as gold cheaper for buyers using other currencies.
But prices were unlikely to rally unless backed by demand which remained tepid this week as prospective investors in China chased bargains in equities after a market rout, while those in India delayed purchases. [GOL/AS]
"No doubt, gold has been a profound disappointment for the bulls over the past few months, including to us, who are not necessarily in the bull camp, but have turned friendly towards gold at various times over the past few months only to see repeated rallies fizzle," INTL FCStone analyst Edward Meir wrote.
Chinese stocks rose sharply for a second day on Friday after Beijing moved to arrest a rout that pulled down key indexes by around 30 percent from mid-June, banning shareholders with large stakes in listed firms from selling.
Also aiding gold, the International Monetary Fund trimmed its forecast for global economic growth this year to 3.3 percent from a previous estimate of 3.5 percent, citing recent weakness in the United States.
(Editing by Himani Sarkar)
