Gold scales 6-week peak as equity markets steadied after a record rally

Spot gold was up 0.3% at $1,489.75 per ounce by 1233 GMT, having earlier hit $1,492.79, its highest since November 6

Gold prices rose to their highest in more than 1-1/2 months on Tuesday, as equity markets steadied after a record rally and weak US data improved demand for bullion in subdued trading ahead of the holidays.

Spot gold was up 0.3% at $1,489.75 per ounce by 1233 GMT, having earlier hit $1,492.79, its highest since Nov. 6.

US gold futures rose 0.4% to $1,493.90.

Data on Monday showed new orders for key US-made capital goods barely rose in November and shipments fell, suggesting business investment will probably remain a drag on economic growth in the fourth quarter.

"There is a pause in the rally in riskier assets and that is why we are seeing gold and the dollar move higher," Vandana Bharti, assistant vice-president of commodity research at SMC Comtrade said, adding weak US economic data added to bullion's safe-haven appeal.

World stocks flatlined near record highs on Tuesday.

Gold, an alternative investment during times of economic and political uncertainties, has risen about 16% so far this year due to US-China trade tensions and dovish global central banks, with the Federal Reserve cutting rates three times in 2019.

"Gold was in a range and trading with a downside bias because of the positive outcome in the China-US trade deal, but it is now discounted in the market," SMC's Bharti said.

Even as Beijing and Washington have taken steps to defuse their dispute, they still diverge on a slew of issues, including anti-government protests in Hong Kong and the treatment of China's Muslim Uighur minority.

Investors are currently awaiting further information on the Phase One trade deal between the world's two biggest economies.

"Any further positivity with regard to the US-China situation would have marginal impact (on gold)," said Fawad Razaqzada, market analyst with Forex.com.

Any negative trade news would increase safe-haven demand for bullion, while an agreement would strengthen the Chinese yuan and make greenback-denominated gold relatively cheaper in China- the world's top consumer of the metal, he added.

Elsewhere, silver rose 0.9% to $17.58 per ounce, having earlier hit its highest since Nov. 7 at $17.65.

Deficit-hit Palladium gained 0.4% to $1,883.82 per ounce, having slipped to its lowest since Nov. 27 in the previous session, while platinum inched up 0.4% to $939.76.