Gold rose as US political turmoil, a missile test by North Korea and a worldwide cyber attack fueled demand for safe-haven assets, while weaker than expected US data pushed the dollar lower, making gold cheaper for holders of other currencies. Spot gold was up 0.2 percent at $1,230.15 an ounce by 2:11 pm EDT (1811 GMT), on track for a third day of gains after hitting an eight-week low of $1,213.81 last week. US gold futures settled up 0.2 percent at $1,230.
"Continued unpredictability of the Trump administration, North Korea flexing its muscles again and weaker data coming from the US has helped bring back some interest," said Ole Hansen, head of commodities strategy at Saxo Bank. Worse than expected US data has reduced expectations of aggressive interest rate increases by the US Federal Reserve this year, though traders still expect a rise in June.
Higher interest rates tend to boost the dollar and push bond yields up, putting pressure on gold prices by increasing the opportunity cost of holding non-yielding bullion. Gold prices pared gains as the US dollar came off its lows and US 10-year Treasury yields bounced up from a 1-1/2-week low.
"Unless there is more stronger data, more than two rate hikes are not very likely (this year)," said Argonaut Securities analyst Helen Lau. Money managers' net longs in COMEX gold fell to the lowest in six-weeks in the week ending May 9. In other precious metals, silver was up 1.1 percent at $16.63 an ounce, after money managers cut their net long stance in silver to the smallest since February 2016 from a record high last month.
Platinum was up 1.1 percent at $927.48, as producers, fabricators and traders gathered for Platinum Week in London. Palladium turned down 1.1 percent to $797.40 an ounce.