Gold firms near 1-week high as political risks buoy demand

Gold prices firmed on Tuesday as Russia-Ukraine concerns kept the safe-haven metal supported near the previous session's over one-week high

Gold held steady on Tuesday as Russia-Ukraine concerns kept the safe-haven metal supported near the previous session's over one-week high, while markets await US inflation data that is crucial for the Federal Reserve's (Fed's) tapering timeline.

Spot gold rose 0.1 per cent to $1,821.61 per ounce by 0434 GMT, having risen to the highest level since January 26 on Monday.

US gold futures were steady at $1,822.5.

"Geopolitical tensions surrounding Russia and Ukraine are pushing gold prices higher. Besides, investors are waiting for Thursday's US inflation data," said Margaret Yang, a strategist at DailyFX, adding that January inflation is projected to rise higher than December levels. 

According to a Reuters poll, the US consumer price index for January is expected at an annual rise of 7.3 per cent, which would be the largest such increase since 1982, and could pile on pressure on the Fed for aggressive tightening.

Gold is considered a hedge against inflation and geopolitical risks, yet rate hikes would raise the opportunity cost of holding non-yielding bullion.