Gold prices edged up on Tuesday as the dollar weakened, but gains were capped as Asian shares recovered from two-month lows. News of billionaire investor George Soros and other big funds buying the metal for the first time in years also supported prices. Spot gold had risen 0.2 percent to $1,275.90 per ounce by 0642 GMT. US gold futures were up 0.3 percent at $1,277.50.
"There is more of a positive tone to rhetoric on the gold price outlook that may affect prices, but eventually it is the US dollar that is the key driver," said analyst Helen Lau of Argonaut Securities in Hong Kong. "Investor flows into ETFs (exchange traded funds) remain pretty strong and that just shows any dips we are seeing in the gold market seem to be a relatively short, with investors taking the opportunity to hold on to their long positions," said analyst Daniel Hynes at ANZ in Sydney.
Assets of SPDR Gold Trust, the world's top gold ETF, have been rising steadily this year and are at their highest since November 2013. US regulatory filings on Monday showed that some influential investors bought into gold through ETFs in the first quarter. Soros, who once called gold "the ultimate bubble", bought 1.05 million shares in the SPDR gold fund, returning to bullion for the first time in three years.