Gold well supported as Asian equities slide on HK protests

SINGAPORE, Sept 29 (Reuters) : Gold recovered from early losses on Monday after Hong Kong pro-democracy supporters clashed with police, keeping Asian stocks on edge and boosting bullion's appeal as a safe haven, though the strength in the dollar kept the metal's gains in check.
Hong Kong democracy protesters defied volleys of tear gas and police baton charges to stand firm in the centre of the global financial hub in the worst unrest there since China took back control of the former British colony two decades ago.
Gold, seen as an alternative investment during times of political instability, got a boost as Hong Kong shares sank more than 2 per cent, while Asian stocks tumbled to a four-month low.
Some bullion dealers, however, were worried that retail sales in Hong Kong, a hot spot for tourists from mainland China, could take a hit because of the protests, especially during the one-week National Day holiday that begins on Wednesday.
"Yes, there will definitely be some impact on gold retail sales," said Dick Poon, general manager of refiner and dealer Heraeus Metals in Hong Kong.
"Usually there are a lot of Chinese tourists that come to Hong Kong for the holiday and end up buying jewellery, but this time they might be turned off by the protests."
China is the biggest buyer of gold, and any drop in consumer demand there could fail to support any rally in prices.
Spot gold was steady at $1,218.76 an ounce by 0642 GMT, after falling as much as 0.3 per cent earlier in the day.
The dollar strength and continued recovery in the US  economy have kept investor interest in gold in check. Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 1.20 tonnes to 772.25 tonnes on Friday - the lowest since December 2008.
The dollar hit a four-year peak against a basket of major currencies on Monday.
Hedge funds and money managers cut their bullish futures and option bets in gold to their smallest since January in the week up to Sept. 23, the Commodity Futures Trading Commission said on Friday.
Among other precious metals, palladium gained about 1 per cent, while silver eased.