SINGAPORE (Reuters) - Gold clung to small overnight gains on Wednesday, but struggled to push away from a four-year low due to the strong dollar and outflows from the top gold exchange-traded fund.
FUNDAMENTALS
Spot gold was firm at $1,167.39 an ounce by 0042 GMT, after snapping a four-day decline on Tuesday with a 0.3-percent rise. The metal on Friday fell to its lowest since 2010 at $1,161.25.
The dollar nursed modest losses early on Wednesday as investors decided to take some profits on a four-session rally that swept the greenback to multi-year highs against the yen and euro.
The dollar has been an investor favourite recently, hitting a four-year high against a basket of major currencies earlier this week.
A stronger greenback makes gold more expensive for holders of other currencies. It also dulls gold's appeal as a hedge.
SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings fell 0.32 percent to 738.82 tonnes on Tuesday - its lowest since September 2008.
The fund tends to influence investor sentiment due to the size of its holdings.
A sharp break in gold prices to their lowest levels in more than four years has unleashed a surge in demand for coins, with buyers in Germany queuing out the door and some U.S. investors returning to the market for the first time in years.
But demand in top buyer China has been subdued, with consumers not showing too much enthusiasm for the price drop in expectation that the metal will fall further.
(Reporting by A. Ananthalakshmi; Editing by Joseph Radford)
