Gold inched up on Wednesday, with sentiment still supported by worries of more ratings downgrades for debt-ridden European countries and the euro's diminishing appeal to investors. Volume was thin ahead of the year-end holidays and some investors were careful about taking too much position ahead of the latest estimates for U.S. gross domestic product (GDP) for the third quarter due at 1330 GMT. Gold [XAU=X 1388.75 3.45 (+0.25%) ] rose $4.99 an ounce to $1,390.29 in Asian trade, having traded in a narrow $5 range. "Every time we touch a high, we can see many people taking a chance to take profits," said Louis Lok, a dealer at Bank of China in Hong Kong. "Tonight, the U.S. will announce the GDP figures. I foresee the dollar keeping its strong trend," said Lok, adding that the data could offer some direction to bullion. Gold, which hovers below a historical high of around $1,430 hit earlier this month, rides on fears the debt crisis that has engulfed Greece and Ireland could also put Portugal and Spain under more pressure. Portugal and Greece were both put on notice their credit ratings could be cut and fellow euro zone debtor Spain had to pay more to issue new debt on Tuesday, suggesting the currency bloc's crisis will rage unabated in 2011. U.S. gold futures [GCG1 1389.2 0.3999 (+0.03%) ] for February added $1.4 an ounce to $1,390.2 an ounce. The euro extended its slow descent on Wednesday as a steady drip of grim ratings news eroded confidence in the single currency, lifting gold's safe-haven appeal in times of uncertainty. The UK and US release their latest estimates for gross domestic product (GDP) for the third quarter. Growth in the United States is likely to be revised up to an annualized 2.8 percent, from 2.5 percent previously. Bullion shrugged off news that the International Monetary Fund had concluded the sale of 403.3 tonnes of gold under a program approved in September 2009 to help boost its lending resources. The IMF announced on Tuesday the completion of the massive gold reserve sale it began a year ago, likely drawing to a close decades of bullion divestment from the public sector. The world's largest gold-backed exchange-traded fund, SPDR Gold Trust [GLD 135.32 0.21 (+0.16%) ], said its holdings eased to 1,298.029 tonnes by Dec. 21 from 1,298.940 tonnes on Dec. 17. In equities, Japan's Nikkei average rose to a fresh 7-month high on Wednesday as strength in resource-related shares in the wake of a rally in commodity prices bolstered market sentiment.

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