By A. Ananthalakshmi SINGAPORE (Reuters) - Gold edged up on Monday towards a one-month high, recovering from earlier losses, as concerns about a slowdown in the global economy persisted despite strong U.S. data. Spot gold edged up 0.2 percent to $1,240.40 an ounce by 0701 GMT after earlier falling 0.3 percent. The metal has gained nearly 4 percent in the past two weeks and hit a one-month high of $1,249.30 on Wednesday. Japanese stocks led a rally in Asia on Monday, after solid U.S. data and earnings calmed tumult in global financial markets, while the dollar also gained in strength against a basket of major currencies. "Global equities look to have recovered from last week's selloff with strong gains being posted late in the week to put downward pressure on the precious metals," said MKS Group's metals dealer Sam Laughlin. "We are expecting $1,250 to form a strong resistance to any move higher in gold, while $1,220-$1,225 should support the yellow metal in the short term," said Laughlin, adding that any further improvements to the global macro climate may see gold drop towards $1,200. Markets took some comfort from Friday's U.S. data that showed the Thomson Reuters/University of Michigan index of consumer sentiment unexpectedly rose in early October to its highest level since July 2007, while groundbreaking for new homes rose more than expected last month. That data reassured investors, who had been worried about the global economy and its impact on U.S. monetary policy, and a resurgent European debt crisis. Gold, along with other safe-haven assets such as bonds and the Japanese yen, had benefited over the past two weeks as investors sought safety from riskier equities. But the worries over the health of the global economy have not been completely removed and markets will still be closely watching economic data. Hedge funds and money managers increased their bullish futures and option bets in gold in the week up to Oct. 14 after eight consecutive weekly declines, the Commodity Futures Trading Commission said on Friday. SPDR Gold Trust, the world's top bullion-backed exchange traded fund, has also been seen an uptick in investments. [GOL/ETF] Among other precious metals, platinum and palladium continued to recover from recent losses, gaining nearly 1 percent on Monday.