Gold rises to near 7-1/2-month high on safe-haven demand

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Gold rose for an eighth session out of nine on Wednesday, climbing towards a 7-1/2-month high as investors sought the safe-haven asset amid tumbling stock markets and concerns about the global economy.

Global equity markets have been hit by worries over the health of the euro zone banking sector, with a very loose monetary policy seen crimping bank profits and consequently their ability to repay debt.

That has triggered a rally in bullion, along with other safe-haven assets such as government bonds and the Japanese yen.

Bullish of gold and dollars: Gartman

was up 0.1 percent at $1,189.71 an ounce by 0705 GMT, after earlier hitting an intraday high of $1,194.06. The metal climbed to $1,200.60 on Monday, the highest since June 22, 2015.

Gold will push higher on continued jitters in the global equity markets, dollar weakness, bullish technicals and a pick up in bullion investment buying, said INTL FCStone analyst Edward Meir.

Federal Reserve Chair Janet Yellen's address to the U.S. Congress later on Wednesday was also expected to support prices.

"We suspect her remarks will come across as unusually dovish, allowing the dollar to resume its descent and giving commodity markets a bit of a lift late in the day on Wednesday," Meir said.

Yellen will defend the U.S. central bank's first rate hike in a decade and likely insist that further rises this year remain on track, albeit at a slower pace.

A slower pace on interest rate hikes could help bullion, which is a non-interest paying asset.

For the time being, traders will take cues from equities and other safe havens.

Asian stocks dipped on Wednesday amid growing concerns about the health of the global banking sector, particularly in Europe.

The Japanese government bond 10-year yield turned negative for the first time on Tuesday and the U.S. Treasury benchmark yield declined to a one-year trough.

The dollar was near 15-month lows against the yen.

The gold price rally, however, has hurt demand from physical buyers of the metal.

Gold prices in India slipped to a record discount as traders struggled to draw buyers. Dealers were offering a record discount of up to $25 an ounce to the London benchmark price.

Top consumer China is closed this week for the Lunar New Year holiday.

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