Gold prices held steady on Wednesday as the US dollar retraced from a 16-month high touched earlier in the week, easing amid a surge in the euro and sterling on a draft Brexit agreement. Spot gold was little changed at $1,202.08 per ounce at 0754 GMT. Prices had slipped to their lowest level since Oct. 11 at $1,195.90 in the previous session.
US gold futures were up 0.1 percent at $1,203.9 per ounce.
"There has been some stalling in the US dollar, the rise has eased helping gold to pick up," said John Sharma, an economist with National Australia Bank (NAB). A weaker greenback makes dollar-denominated gold cheaper for holders of other currencies.
"We are seeing investors and speculators snapping up gold because gold has the potential to go up to $1,230 to $1,240," Sharma added. The yellow metal has fallen about 12 percent since hitting a peak in April as investors bought the dollar with the US-China trade war unfolding against a background of higher US interest rates.
"Safe haven appeal has dimmed amidst market reports on the resumption of US-China trade negotiations to avert an escalation in import duties between the world's largest economies," Benjamin Lu, a commodities analyst with Phillip Futures, said in a note.
"Though gold prices have shown for a slight recovery, headwinds will plague the precious metal at the 1,212 mark."
Spot gold may bounce to $1,211 per ounce, as it has found a support around $1,195, said Reuters technical analyst Wang Tao.
Holdings of the world's largest gold-backed exchange-traded fund, SPDR Gold Trust, fell 0.11 percent to 761.16 tonnes on Tuesday.
Among other precious metals, silver was up 0.1 percent to $14.00 per ounce.
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