Economic data 'could support gold'

Analysts are awaiting the next set of US economic data for clues as to how gold prices may progress in the long term.

Both leading indicators data, as well as Chicago Federal National activity index data, are due out this week and could act to support gold prices, as investors seek to use the precious metal as a hedge against inflation.

"Leading indicators are expected to have fallen again, which might be supportive for gold as the Fed might keep rates unchanged for some time to come," Peter Fertig, a consultant for Dresdner Kleinwort - an investment bank that provides advice, financing and liquidity - told Reuters.

Standard Bank analyst Manqoba Madinane added that interest could be spurred through bargain fund buying.

Earlier this month, Tom Kendall, an analyst at Mitsibushi International, predicted that gold prices will be back up to the record-breaking levels last seen in March by the end of 2008.