Gold hits near one-week high on weak dollar, geopolitics
Gold prices hit the highest in nearly a week on Tuesday as the dollar weakened and as investors awaited potential U.S. action against the suspected use of chemical weapons in Syria.
"Geopolitics is taking the main driving seat this week, so gold has potentially got some room for the upside," said Jonathan Butler, commodities analyst at Mitsubishi in London.
"A lot will hinge on what is happening geopolitically between Russia, Syria, Iran and all sorts of other countries that could be potentially drawn into this."
Spot gold was up 0.3 percent at $1,340 an ounce at 1410 GMT, the highest since April 4.
U.S. gold futures added 0.2 percent to $1,343.20 an ounce.
If gold breaks through resistance of $1,340, it could move back to the late March highs just under $1,360, Butler added.
Trump on Monday promised quick, forceful action in response to a deadly suspected chemical weapons attack in Syria, appearing to suggest a potential military response.
Gold is often seen as an alternative investment during times of political and financial uncertainty.
Gold also got a boost as the dollar index dipped to a two-week low against a basket of currencies on Tuesday after Chinese President Xi Jinping`s promise to cut import tariffs eased concerns about a trade conflict.
Xi promised to open the country`s economy further and lower import tariffs on products including cars. His comments spurred a rally in global equity markets.
Markets are looking ahead to this week`s Federal Reserve`s minutes on its last policy meeting and U.S. CPI data for cues on the pace of interest rate hikes this year.
In other precious metals, silver gained 0.8 percent to $16.58 an ounce.
Platinum fell 0.5 percent to $927.25 an ounce, after gaining about 2 percent in the previous session, the most in nearly two months.
Palladium rose 2.2 percent to $950 an ounce. The auto catalyst metal gained over 3 percent on Monday, its biggest daily percentage rise since Jan. 12.
Platinum fell back to a discount to sister metal palladium on Tuesday after rising to a premium last Thursday. Last September, palladium gained the upper hand over platinum for the first time in 16 years.
"We are not convinced the platinum-palladium ratio can hold consistently above parity this year as strong trends in the auto sector which have weighed on the ratio remain in place," UBS analyst Joni Teves said in a note.
Diesel vehicles use mostly platinum in catalytic converters while petrol cars largely use palladium, but diesel sales in Europe`s largest car markets have been falling.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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