(Corrects company name and designation of analyst in 12th paragraph in Oct. 18 story)
By Sumita Layek and Arpan Varghese
(Reuters) - Gold rose on Thursday as renewed weakness in global stock markets spurred investors to seek refuge in bullion, which has also been helped by an improved technical outlook.
Spot gold rose 0.3 percent to $1,226.11 per ounce at 2:53 p.m. EDT (1853 GMT). U.S. gold futures settled up $2.7, or 0.22 percent, at $1,230.10 an ounce.
"Renewed weakness in equity markets might trigger additional buying in gold," said Alexander Zumpfe, a precious metals trader at Heraeus.
"Gold continues to look well supported by short-covering and fresh buying after it recently installed a short-term uptrend. We continue to see good physical demand on every price dip," he added.
U.S. stocks fell on Thursday as weak earnings reports from industrials raised worries over rising expenses and the impact of tariffs, adding to concerns of higher borrowing costs after hawkish commentary in the U.S. Federal Reserve's minutes.
"Overall, we have been technically breaking above the previous highs, so it will be difficult for gold prices to move below that," said ABN AMRO analyst Georgette Boele.
The global stock market sell-off on Monday boosted gold's appeal, helping the yellow metal to a 2-/1/2-month peak of $1,233.26.
A rise above the 100-day moving average, around $1,226, was also supporting gold, with some analysts saying a clear break above that level could trigger further gains and put further pressure on short-sellers.
The dollar index rose to a one-week high after the minutes from the last Fed meeting reiterated a hawkish stance on monetary policy, normally a bearish signal for gold.
"We have seen strong inflows in exchange traded funds (ETF) in the last weeks that sort of indicate investor sentiment is turning now for the metal, moving to the positive side," ETF Securities analyst Nitesh Shah said.
Holdings of the SPDR Gold Trust, the largest gold-backed ETF, have gained more than 2 percent since Oct. 3.
"Geopolitical and macroeconomic factors are still not indicating exuberance and risk appetite returning to markets with full throttle," said Sugandha Sachdeva, vice president of metals, energy and currency research at Religare Broking Ltd.
Trade war concerns, a hawkish U.S. central bank and tensions between the United States and Saudi Arabia are seen weighing on appetite for riskier assets. This bodes well for gold as a hedge against market volatility and a portfolio diversifier, Sachdeva added.
In other precious metals trading, silver was down 0.2 percent at $14.59 per ounce, having earlier touched its lowest since Oct. 11 at $14.41.
Platinum slipped 0.3 percent to $829 after hitting a one-week low of $821, while palladium gained 0.3 percent to $1,072.25.
(Reporting by Sumita Layek, Arpan Varghese and Swati Verma in Bengaluru; additional reporting by Vijaykumar Vedala; editing by Edmund Blair and Jonathan Oatis)