* Gold gained over 8 pct in Jan, best month in 3 years
* Weak China factory data follows slow US Q4 GDP
* Coming Up: U.S. ISM manufacturing PMI; 1500 GMT (Updates prices)
SINGAPORE, Feb 2 (Reuters) - Gold steadied near $1,280 an ounce on Monday, after posting its biggest monthly gain in three years, as a shaky outlook for the global economy preserved bullion’s safe-haven draw.
A pair of surveys showed China’s factory sector struggled in January, adding to worries over the global outlook after U.S. gross domestic product marked a sharp slowdown in the fourth quarter.
“Overall there’s a sense that the global economy is not doing well and that has boosted the safe-haven appeal of gold. In the short term, we should see gold stay above $1,250,” said Howie Lee, investment analyst at Phillip Futures.
Spot gold was dipped 0.3 percent to $1,279.50 an ounce by 0659 GMT after rising 2 percent on Friday. It ended January with a gain of 8.4 percent, its largest monthly increase since January 2012.
But Lee said the metal’s steep gains in the previous session may have been “overdone”.
“A single disappointing Q4 GDP data is unlikely to sway the Fed’s decision drastically,” said Lee, who thinks that the U.S. central bank is still well on track to raise interest rates by June amid signs of a generally strengthening economy.
U.S. gold for April delivery was little changed at $1,280.10 an ounce.
U.S. economic growth slowed to a 2.6 percent annual pace from a 5 percent rate in the third quarter as weak business spending and a wider trade deficit offset the fastest pace of consumer spending since 2006.
China’s factory sector unexpectedly shrank for the first time in nearly 2-1/2 years in January and firms see more gloom ahead, official data showed on Sunday. A separate private survey released on Monday showed Chinese manufacturing activity contracted for a second straight month in January.
“With the Chinese economy facing headwinds from weaker European demand and disinflation, we see rising pressure for more stimulus measures, such as liquidity injections, interest rate cuts or RRR (reserve requirement ratio) cuts,” Mizuho Bank said in a note.
Gold’s firm tone was also backed by strong inflows into exchange-traded funds.
Holdings at SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, stood at 24.4 million ounces as of Thursday, the highest since mid-October.
Precious metals prices 0659 GMT Metal Last Change Pct chg YTD pct chg Spot Gold 1279.50 -3.30 -0.26 8.11 Spot Silver 17.12 -0.10 -0.58 9.32 Spot Platinum 1232.50 -2.75 -0.22 2.72 Spot Palladium 773.40 4.65 +0.60 -2.43 COMEX GOLD APR5 1280.10 0.90 +0.07 8.11 COMEX SILVER MAR5 17.14 -0.07 -0.42 9.85 Euro/Dollar 1.1306 Dollar/Yen 117.60 COMEX gold and silver contracts show the most active months (Editing by Himani Sarkar)