Gold prices rose on Tuesday as the dollar slipped lower against a basket of currencies and concerns over the global economic outlook trumped some expectations that the US Federal Reserve could raise interest rates this year. Gold slipped to its lowest level in a week on Monday, under pressure after forecast-beating US non-farm payrolls employment data on Friday revived speculation that the Fed could press ahead with a rate hike.
However, the precious metal quickly found support. "There is still a view that we could see a rate hike this year but there are enough risk issues out there to justify holding gold," Citigroup analyst David Wilson said. Spot gold was up 0.4 percent at $1,340.47 an ounce by 2:57 pm EDT (1857 GMT), off an earlier low of $1,330.03, while US gold futures for December delivery settled up 0.4 pct at $1,346.7 an ounce.
"If you look at the US Treasury market, those yields are a bit lower, the dollar is off a little bit and then you have some selling off the highs in the S&P 500 ... making it a little bit more attractive to hold gold," said Mike Dragosits senior commodities strategist at TD Securities. Among other precious metals, silver was up 0.60 pct at $19.831 per ounce after touching a near two-week low on Monday. Platinum was 0.6 percent higher at $1,155.6. Palladium, which earlier touched a two-week low at $683.53, was up 0.3 percent at $$692.22.
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