prices edged up for a second session on Tuesday as the US dollar
weakened, but rising equities capped gains amid speculation over when the US Federal Reserve
will raise interest rates.
was up 0.2 per cent at $1,258.68 an ounce at 0432 GMT
futures had risen 0.3 per cent to $1,259.80 an ounce.
US Fed Vice-Chairman Stanley Fischer said on Monday that economic stability could be threatened by low interest rates, but it was "not that simple" for the Fed to hike.
is riding on the dollar
weakness," said Helen Lau, analyst at Argonaut Securities in Hong Kong.
"The US will eventually raise interest rates, but investors still feel that central banks across the world will continue to be accommodative," she said.
Holdings of SPDR Gold
Trust, the world's largest gold-backed exchange-traded fund (ETF), rose for a third straight session on Monday. They were up 0.18 per cent at 967.21 tonnes.
"Markets do not think that the US will continuously raise rates... Maybe that's why they (ETFs) still want to buy gold," Lau said.
is highly-sensitive to rising rates, which lift the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar, in which it is priced.
index, which measures the greenback against a basket of currencies, was down 0.2 per cent at 97.691 after touching seven-month highs Monday.
A stronger greenback makes dollar-denominated gold
more expensive for holders of other currencies.
Asian stocks crept up on Tuesday thanks to a rebound in oil prices.
may test resistance at $1,266 per ounce, as suggested by its wave pattern and Fibonacci projection analysis, according to Reuters technical analyst Wang Tao.
"Prices have been consolidating below the 200-day moving average support of $1,264 a troy ounce," said Hareesh V, research head at Geofin Comtrade Ltd.
"Looking ahead, as long as prices stay above the stiff support of $1,240, we expect a recovery in prices. A close above $1,264 could take prices higher to $1,282 to $1,300 followed by $1,312," he added.
is likely to recover to above $1,300 an ounce next year as a pickup in physical demand counters more potential US rate increases, a Reuters poll at an industry event showed.
Silver was up 0.8 per cent at $17.57 a ounce.
Platinum rose 0.3 per cent to $940. It touched a new over seven-month low of $923 on Monday.
Palladium was up nearly one per cent at $643.20.