By Diptendu Lahiri
(Reuters) - Gold steadied on Wednesday, paring earlier gains as a rally in equities reduced the attraction of the non-yielding metal, while global growth concerns and prospects for dovish monetary policy kept bullion supported.
Spot gold was $1,416.07 per ounce as of 12:12 p.m. EDT (1612 GMT), off its highest level since June 25 of $1,435.99.
However, U.S. gold futures were up nearly 1% to $1,419.10.
The S&P 500 index hit a record high at the open as benchmark bond yields tumbled on fears of a global recession and expectations of interest rate cuts by central banks.
The metal reversed course briefly after the U.S. markets opened, but later steadied.
"Gold has had quite a strong performance in the last two days and this fall is just an ebb in the flow," said Daniel Ghali, commodity strategist at TD Securities
The case for gold, which hit a six-year high last week at $1,438.63 driven by a dovish outlook from major central banks and an escalation of tensions between the United States and Iran, is still positive, analysts said.
European Union leaders' nomination of IMF chief Christine Lagarde as Mario Draghi's replacement at the helm of the European Central Bank reinforced expectations of monetary policy easing in the bloc.
"German 10-year Bund yields were at record lows and the U.S. benchmark yields are also falling on government monetary policy, giving the equity markets a boost and taking away investor interest from gold," said Jim Wyckoff, senior analyst at Kitco.com.
Meanwhile, U.S. President Donald Trump on Tuesday announced two nominees to fill vacant posts on the Federal Reserve Board. Trump says he wants lower rates to better compete with China and has accused Jerome Powell, whom he appointed to lead the central bank in early 2018, of doing a "bad job."
The yields on U.S. 10-year Treasury notes hovered above their lowest level since November 2016 after weaker-than-forecast U.S. private jobs data in June.
A number of government yields around the world were also pressured after Bank of England Governor Mark Carney flagged uncertainties over Brexit and trade conflicts that prompted speculation the central bank may lower interest rates.
On the technical front, gold will find support at Tuesday's close, around $1,418, and could find resistance around $1,440, TD Securities' Ghali added.
Holdings of the SPDR Gold Trust have gained more than 5% over the past one month.
Silver was down 0.1% at $15.29 per ounce. The metal is unlikely to follow gold's upward trajectory, analysts said. Platinum climbed 1.7% to $841.12 per ounce, while palladium rose 0.9% to $1,571.55, having earlier touched a more than three-month peak of $1,572.50.
(Reporting by Diptendu Lahiri in Bengaluru; Editing by Matthew Lewis and Susan Thomas)