Gold steadies, set for best month since February after Brexit shock

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Gold steadied, holding slightly lower on Thursday as the other markets showed signs of stabilizing, but remained on track for its biggest monthly rise since February in the wake of last week's vote in Britain on quitting the European Union.

Shares, bonds and currencies plunged on Friday after the British referendum sent investors scurrying for the perceived safety of gold, which leapt to its highest in nearly two years at $1,358.20 an ounce.

But the immediate market flurry over the vote settled on Thursday, with European stocks and the pound holding on to a third day of gains.

Spot gold was at $1,320.76 an ounce, up 0.17 percent from $1,318.51 late on Wednesday, while U.S. gold futures for August delivery settled down $6.30 at $1,320.60 and were last down $2.70 at $1,324.20.

Profit taking and a lack of physical demand is keeping gold hemmed in, Afshin Nabavi, head of trading at MKS, said. "Gold is making a solid base around $1,300-1,305," he said. "$1,300-1,350 seems to be the current range. If it can hold here a few more days, we may see physical demand kick in."

Holdings of the world's largest gold-backed exchange-traded fund, New York-listed SPDR Gold Shares, rose by 2.7 tonnes on Wednesday to the highest level in three years.

Its holdings have increased by 81.4 tonnes this month and 131 tonnes this quarter, marking a second consecutive quarterly inflow for the first time since late 2012.

Gold remains up 8.6 percent this month, and is on track for a second straight quarterly gain. Silver is heading for its best quarter in nearly four years, up about 19 percent.

Spot silver was 2.4 percent higher at $18.71 an ounce on Thursday, having earlier hit a fresh 17-month high of $18.47.

It rallied nearly 3 percent on Wednesday, taking the gold-silver ratio, which measures the number of silver ounces needed to buy an ounce of gold, to its lowest in nearly nine months at 71.9.

"Silver is clearly profiting from two different sides at once just now: from the higher gold price on the one hand and from firm base metal prices on the other, as silver is used for the most part in industry," Commerzbank said in a note.

Among other precious metals, platinum futures were up 1.7 percent at $1,031.30 an ounce, while palladium futures were 1.44 percent higher at $599.05.