Gold market surplus shrinks as fund inflows offset weak Asian buying -GFMS

* Gold ETF inflows hit highest half-year on record in H1 * GFMS lifts 2016 gold price forecast to $1,279/oz * Physical gold demand slides to 7-year low in Q2 By Jan Harvey LONDON, July 26 (Reuters) - A surge in Western gold investment helped offset sliding Asian demand in the second quarter, GFMS analysts at Thomson Reuters said on Tuesday, as they hiked their gold price forecast for the year in response to jitters over the economic outlook. In the Q2 update of its Gold Sur

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