(Reuters) – Gold bounced back on Tuesday from multi-week lows touched in the previous session as mounting concerns of an economic slowdown exacerbated by a cut in the International Monetary Fund’s global growth forecast drove investors to the safety of bullion.

Spot gold was up 0.3 percent to $1,283.50 per ounce at 1131 GMT, recovering from a dip to its lowest since Dec. 28, at $1,276.31, on Monday. U.S. gold futures were little changed at $1,282.80.

“Gold and safe-haven demand are in a stable relationship … There is a bit of risk-off sentiment” said ABN AMRO analyst Georgette Boele, adding weakness in European stock markets and lingering doubts surrounding the U.S.-China trade spat were supporting gold.

Pessimism about global growth weighed on global stocks after the IMF warned of a darkening outlook and China confirmed its slowest growth rate in nearly 30 years.

In its World Economic Outlook report, the IMF predicted the global economy would grow at 3.5 percent in 2019 and 3.6 percent in 2020, down 0.2 and 0.1 percentage point respectively from last October’s forecasts.

Gold held its own against gains in the dollar, with the greenback also sought as a refuge by investors concerned by the dampening global economic outlook.

The metal was buoyed too by limited buying on the dips, analysts said.

“What we have positive for gold is that there is a renewed investment demand so the holdings of the physically pegged products continue to grow,” said Julius Baer analyst Carsten Menke.

Holdings of SPDR Gold, the largest gold-based exchange-traded fund, rose 1.5 percent on Friday to 809.76 tonnes.

Gold has risen more than 10 percent since touching 1-1/2-year lows in mid-August, mainly due to tumultuous stock markets and a softer dollar.

Adding to gold’s appeal, U.S. Federal Reserve officials have left little doubt that they want to stop raising interest rates, at least for a while.

Higher interest rates tend to reduce appetite for non-yielding gold.

“On a 12-month horizon and then further out, we see more upside once the dollar starts to weaken, as more investment demand comes back into the market, especially after we get clear evidence that the global economy is slowing down,” Menke added.

On the technical front, spot gold may fall to $1,268, as it has broken a support at $1,279 per ounce, according to Reuters technical analyst Wang Tao.

Meanwhile, spot palladium, which hit a record high of $1,434.50 last week driven by a sustained deficit and rising demand, slipped 1.4 percent to $1,343. It earlier touched $1,331, its lowest since January 16.

Silver rose 0.4 percent to $15.28 an ounce while platinum edged 0.1 percent higher to $792, recovering from its lowest since Jan. 2, at $784, earlier in the session.