* SPDR gold holdings down 2.7 pct this year
* Gold expected to hover above $1,283/oz support level - analyst
* Market awaits ECB’s policy meeting, U.S. non-farm payrolls data
By K. Sathya Narayanan
March 6 (Reuters) - Gold prices inched up on Wednesday, after recovering from a more than five-week low in the previous session, supported by a pause in global equities’ rally, while a firmer dollar curbed gains.
Spot gold was up 0.2 percent at $1,290.04 per ounce, as of 0654 GMT, after slipping to $1,280.70 in the previous session, its lowest since Jan. 25.
U.S. gold futures were up about 0.4 percent at $1,289.60 per ounce.
Asian stocks held their ground on Wednesday as Chinese equities rallied on stimulus hopes, although a resurgence in regional tensions capped broader gains.
“Gold is firming after the sharp fall as competing influences of the interest bearing assets are reversing. Bond yields have started to weaken gently, and while the dollar is going up, equities are seeing headwinds,” said Benjamin Lu, an analyst with Singapore-based Phillip Futures.
“Gold in longer term is very much supported, partially due to shift in sentiments and global slowdown. In the shorter term, gold continues to show signs of bearish weakness and there is some room to go further south before it resumes its positive trend.”
The dollar index held near a two-week high hit in the previous session.
Markets were a bit cautious over the Sino-U.S. trade dispute and are awaiting developments in talks between the two major economies after a tit-for-tat tariff war, analysts said.
U.S. Secretary of State Mike Pompeo said President Donald Trump will reject any trade deal that is not perfect but that they will still keep working on an agreement rekindling concerns in the market.
While a series of robust data from the United States has strengthened the dollar, the Federal Reserve’s patience on policy is nowhere close to running out.
Markets will now look ahead to the European Central Bank’s monetary policy meeting on Thursday and U.S. non-farm payrolls data on Friday.
On the technical front, gold is expected to hover above a support at $1,283 per ounce, as it seems to be stabilising around this level, according to Reuters analyst Wang Tao.
However, gold continues to see downwards pressure from outflows in exchange traded funds and a firmer dollar, MKS PAMP Group said in a note.
Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, dropped 2.7 percent so far this year.
Among the other precious metals, palladium slipped 0.5 percent to $1,507.77 per ounce.
Spot silver gained 0.1 percent to $15.14 per ounce, after slipping to its lowest since Dec. 27 in the previous session, while platinum dipped 0.4 percent to $833.10 per ounce. (Reporting by K. Sathya Narayanan in Bengaluru, Editing by Sherry Jacob-Phillips)