Gold prices rose to a one-week high on Wednesday, rebounding from a seven-month low touched in the previous session, as a softer US dollar stoked demand for the yellow metal. Spot gold was up 0.6 percent at $1,260.06 an ounce as of 0712 GMT after touching $1,261.10, a one-week high.
The yellow metal has gained over $20 from Tuesday's low of $1,237.32 an ounce, its weakest since Dec. 12. US gold futures for August delivery were trading 0.6 percent higher at $1,261.30 an ounce. "Modest declines in the US dollar index and equity market weakness is helping gold," said John Sharma, an economist at National Australia Bank.
"Since the trade wars have been doing the rounds, if anything we've seen gold come lower. But if it continues to escalate gold could go only one way and that's higher," a Sydney-based trader said. Spot gold may rise more to $1,268 per ounce, as it has cleared a resistance at $1,256, Reuters technicals analyst Wang Tao said.
Markets are now awaiting minutes of the June US Federal Reserve meeting due on Thursday and the US non-farm payrolls data on Friday for cues on monetary policy. Holdings of the world's largest gold-backed exchange-traded fund, SPDR Gold Shares, fell 0.73 percent to 803.42 tonnes on Tuesday.