Gold traded sideways in Asian hours on Tuesday, buoyed by safe-haven demand with upside potential restricted by a firm dollar and outlook for higher interest rates in the United States. Spot gold was nearly unchanged at $1,311.51 per ounce at 0619 GMT. US gold futures for June delivery were, however, down 0.5 percent at $1,311.30 per ounce. The rising tensions in Gaza had induced some safe-haven buying for gold earlier in the session, ANZ analysts said in a note.
"We're seeing little sparks of interests on the back of these issues but at the moment it doesn't look significant enough to raise concerns over the medium-term which support a more sustained level of safe-haven buying," ANZ analyst Daniel Hynes said. "The market's been waiting for the next rate hike by the Fed... and I think gold prices are going to remain under pressure till we get through that hike," Hynes said. Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.17 percent to 856.17 tonnes on Monday. Spot gold may retest a support at $1,302 per ounce, Reuters technical analyst Wang Tao said.