The U.S. dollar index edged down making greenback-priced bullion less expensive for overseas buyers.
SEATTLE (Scrap Monster): Gold prices drifted higher on Tuesday, aided by global trade tensions between the U.S. and its main trading partners, and a softer dollar.
Spot gold rose 0.8% to $3,005.21 an ounce by 0847 GMT, after hitting its lowest level since March 13 on Monday. U.S. gold futures gained 1.6% to $3,020.70.
Spot gold remains nearly 15% higher for the year driven by geopolitical and economic uncertainties, strong central bank demand, and increased flows into gold-backed exchange traded funds.
"Gold is rebounding supported by a weaker U.S. dollar and persistent uncertainty surrounding trade war developments," said Zain Vawda, an analyst at MarketPulse by OANDA.
The U.S. dollar index edged down making greenback-priced bullion less expensive for overseas buyers.
China refused to bow to what it called "blackmail" from the U.S. as a global trade war ignited by President Donald Trump's sweeping tariffs showed little sign of abating. The European Commission said it had offered a "zero-for-zero" tariff deal, while striking back with 25% tariffs on some U.S. imports.
"If tariffs continue to create uncertainty for market participants alongside anticipation of further rate cuts, this combination could pave the way for a renewed rally in gold prices," Vawda added.
The markets will be closely monitoring minutes from the U.S. Federal Reserve's latest policy meeting due on Wednesday.
Traders are expecting a 97-basis-point rate cut by the Fed by the end of the year, with 40% anticipating it to begin as early as May. Zero-yield bullion tends to thrive in a low interest rate environment.
"The $3,000 is a very important psychological level so that's an important support level right now... (and) if it goes through the resistance level of $3,050 then I can see it's reaching $3,100," said Ricardo Evangelista, senior analyst at brokerage firm ActivTrades.
Spot silver rose 0.4% to $30.24 an ounce, platinum firmed 1.1% to $923.10 and palladium added 0.1% to $919.78.
Courtesy: www.reuters.com
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