Gold shook off earlier losses on Tuesday to move back above the key $1,200-per-ounce level, benefiting from a slight retreat in the dollar after a rally driven by the U.S. interest rate outlook and Brexit talks.
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Bullion rose on Tuesday after seven consecutive losing sessions, supported by limited buying on the dips from price-sensitive customers.
"The weaker dollar is supporting gold and a lot of people are willing to purchase the metal below $1,200," said Phil Streible, senior commodities strategist at RJO Futures in Chicago.
The dollar index <.dxy>, a measure of the greenback`s performance against a basket of major currencies, eased 0.4 percent, having hit its highest since June 2017 in the previous session, making gold less expensive for holders of other currencies. [FRX/]
The dollar has benefited over the last week from expectations for further U.S. interest rate hikes, as well as concerns over Italy`s budget and ongoing Brexit talks.
Gold has shed some $50 over two weeks on the back of a rising U.S. dollar. The yellow metal has fallen about 12 percent since hitting a peak in April as investors bought the dollar as the U.S.-China trade war unfolded against a background of higher U.S. interest rates.
"There has been a bit of physical demand around the $1,200 levels," said David Meger, director of metals trading at High Ridge Futures. "The continued weight on the gold market of late has been due to the slowly rising interest rate environment."
Bullion had traded between $1,211 and $1,243 an ounce for much of the last month before dipping sharply over the last two sessions.
"Gold`s fall has done a lot of technical damage so the bounce we see could be short-lived," said Fawad Razaqzada, an analyst with Forex.com.
Meanwhile, holdings of the world`s largest gold-backed exchange-traded fund, SPDR Gold Trust
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(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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