Gold retreated from a one-month high hit earlier on Tuesday as stock markets and dollar took heart after the United States and China decided to keep negotiating their trade deal, which has rattled financial markets for months.
Spot gold was down 0.3% at $1,296.27 per ounce as of 10:47 a.m. ET (1447 GMT), after hitting $1,303.26 earlier in the session, its highest since April 11.
U.S. gold futures were down 0.4% at $1,296.7 an ounce.
“We are seeing a little readjustment because the dollar index is back up a little and stocks are rebounding and (gold)traders are taking a little money off the table for now,” said George Gero, managing director at RBC Wealth Management.
The dollar index was up about 0.2% after falling to near one-month low in the previous session. The Wall Street opened higher following a sharp selloff in the previous session.
Spot gold climbed 1.1% on Monday, marking its biggest one-day percentage rise since Feb. 19, after China announced it would impose higher tariffs on a range of U.S. goods, which followed Washington’s decision last week to hike levies on $200 billion in Chinese imports.
Since then both the economies have agreed to keep negotiations going to end the prolonged trade war, easing some concerns about a further escalation in trade war.
Gold investors were also keeping tabs on escalating tensions between the United States and Iran after Saudi Arabia said that two of its oil tankers were among those attacked off the coast of the United Arab Emirates.
Headlines such as escalating Iran tensions are keeping gold from selling off, Gero added.
Rise in investor interest in bullion was also evident after holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose 0.44% on Monday, its biggest one-day rise in nearly two months.
“Gold is turning bullish on the daily charts as prices have broken above the previous higher low at $1,290,” Lukman Otunuga, research analyst at FXTM, said in a note, adding, “a solid breakout and daily close above $1,300 is likely to encourage a move higher towards $1,310 and $1,324, respectively.”
Among other precious metals, silver was up 0.1% at $14.78 per ounce.
Platinum rose 0.1% to $854.25 an ounce, while palladium dipped 0.4% to $1,316.35.
