Gold prices edged higher on Tuesday as investors resorted to bargain-hunting after the precious metal fell to over one-month lows weighed down by a stronger dollar.
Spot gold was up 0.2 percent at $1,202.57 per ounce at 07:46 GMT. Prices fell to their lowest level since Oct. 11 at $1,199.72 earlier in the session.
US gold futures were flat at $1,203.8 per ounce.
“It’s been some time that we have seen this level, so we are seeing some buying here,” said Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong.
“However, a stronger dollar has capped the market.”
The dollar index, which measures the greenback against a basket of six major currencies, was hovering near a 16-month high of 97.69 hit on Monday.
A firmer greenback makes bullion expensive for holders of other currencies as the commodity is priced in dollars.
Investors also had their attention turned to US-Sino trade tensions and political uncertainties in Europe amid fears of a no-deal Brexit, and a standoff between Rome and the European Union over Italy’s budget.
“We are likely to see a re-test of $1,200 before any uptrend is resumed,” traders at MKS PAMP said in a note, adding
“political uncertainty and softer global equities should drive (gold’s) safe-haven demand over medium-term.”
Meanwhile, Asian shares pared losses on Tuesday as hopes of a de-escalation in the Sino-US tariff war rose on a report that China’s top trade negotiator was preparing to visit the United States ahead of a meeting between the two countries’ leaders.
Spot gold may bounce moderately to $1,211 per ounce before breaking a support at $1,202 and falling more to $1,192, said Reuters technical analyst Wang Tao.
Holdings at SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose 0.90 percent to 762.00 tonnes on Monday.
Among other precious metals, silver was up 0.6 percent at $14.04 per ounce, having touched a more-than-two-month low of $13.95 earlier in the session.