NEW YORK: Gold rose on Tuesday, supported by a slight pause in the dollar’s rally as the United States and China continue talks aimed at ending their trade conflict.
Spot gold was up 0.4% at $1,313.81 an ounce at 1307 GMT after falling 0.4% in the previous session.
US gold futures gained 0.4% to $1,317.50.
“The sentiment this morning is a little more constructive towards the deal,” said ING analyst Warren Patterson.
“The (gold) price direction really hinges on how these trade talks play out. A positive outcome at trade talks could weigh on the dollar and that is constructive for gold prices.”
The dollar steadied after climbing to its highest level since mid-December, having been the preferred refuge for investors concerned about the trade row.
US Trade Representative Robert Lighthizer arrived in Beijing on Tuesday ahead of high-level trade talks to hammer out a deal ahead of a March 1 deadline.
Also on investors’ radar is a long-drawn logjam in Washington over funding for a border wall with Mexico, as well as the continuing uncertainties surrounding Britain’s planned departure from the European Union.
US congressional negotiators on Monday reached a tentative deal to try to avert another partial government shutdown on Saturday.
Investors are worried about the economic impact of a US government shutdown when global growth is already lean.
“Trade and geopolitical risks remain to underpin (gold) price action and we expect this to continue over the near-medium term, with supportive price interest remaining broadly toward US$1,300 – US$1,310,” MKS PAMP Group said in a note.
For the near term, gold is expected to stay above US$1,300, which is seen as a critical support level in charts followed by technical traders, analysts said.
“If we now see short-term resistance break around US$1,315, then this could lead to further technical follow-up buying pressure towards – and possibly beyond – January’s high of US$1,326,” said Forex.com analyst Fawad Razaqzada.
Among other metals, palladium was 0.6% higher at US$1,394 an ounce, while silver gained 0.5% to US$15.78.
Platinum firmed 0.2% to US$783.31 an ounce, having touched its lowest since Jan 2 at US$779.50 in the previous session.