SINGAPORE: Gold rose for a fourth straight day on Tuesday, hovering near a one-month high hit in the previous session, boosted by a weaker dollar and strong buying from China.
Gold has recovered nearly $160 from a three-year low of $1,180.71 an ounce, hit on June 28, after the US Federal Reserve said it would only start phasing out its stimulus once it is sure the economy is strong enough to stand on its own.
This allayed fears of imminent cuts to the Federal Reserve's monthly bond purchases, which is tantamount to printing money and supports gold's appeal as a hedge against inflation.
Spot gold rose 0.1 percent to $1,336.84 by 0332 GMT, after technical buying pushed it past the $1,300 level on Monday. The precious metal is on track for a more than 8 percent jump in July, its biggest monthly rise in 1-1/2 years.
"People are more confident that the downside risk has subsided just a little bit. The message from the Fed was not too worrisome as it was before," a Hong Kong-based precious metals trader said.
"Demand from China is quite healthy and has been a lot more reliable. It's helping offset some of the losses from India where demand has fallen off."
India, the world's biggest consumer of gold, has imposed new rules on gold imports this year in an effort to reduce its current account deficit.
China, on the other hand, has been buying consistently, gold dealers have said, pointing to elevated premiums on the Shanghai Gold Exchange.
Shanghai gold is about $20 an ounce more expensive than London spot prices, and gold futures were up more than 2 percent on Tuesday.
Spot gold also drew support from a softer dollar that made assets priced in the greenback cheaper for holders of other currencies.
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