BENGALURU: Gold prices were steady on Tuesday, after moving in a tight range in holiday-thinned trading, holding above the 1,220 level as the dollar was pressured by weak US economic data and a clouded interest rate outlook.
Spot gold was little changed at $1,224.45 per ounce at 0735 GMT.
US gold futures were flat at $1,224.8 per ounce.
The market is very quiet today and appears to be in a holiday mood ahead of the US Thanksgiving,” said Peter Fung, head of dealing at Wing Fung Precious Metals in Hong Kong.
“The dollar has come under some pressure giving some support to gold.”
The dollar index, which measures the greenback against a basket of six major currencies, was trading near an over one-week low that it hit in the previous session.
The currency came under pressure as US Federal Reserve officials cautioned on the global growth outlook and weak data at home, pointing to a potentially slower pace of rate hikes.
The Fed is still expected to raise interest rates again next month and three times next year, but a strong majority of economists polled by Reuters over the past week say the risk is it will slow that pace down.
“The Feds have changed the landscape to a more dovish terrain suggesting that they too are turning a little bit risk-averse,” Stephen Innes, APAC trading head at OANDA in Singapore, said in a note.
Higher US interest rates tend to boost the dollar and also push up bond yields, reducing the appeal of non-yielding bullion.
“Trade tensions remain heightened between the US and China, global equities are under pressure, while Brexit negotiations continue to create uncertainty across markets, keeping gold’s safe-haven status intact,” traders at MKS PAMP said in a note.
In a veiled criticism of Washington that further sours the tone of China-US ties ahead of a G20 meet, a top Chinese diplomat said on Monday that the APEC summit’s failure to agree on a communique resulted from certain countries “excusing” protectionism.
Spot gold may test a support at $1,211 per ounce, a break below which could cause a loss to $1,202, said Reuters technical analyst Wang Tao.
Meanwhile, holdings at SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose 0.16 percent to 760.86 tonnes on Monday.
Among other precious metals, silver was down 0.2 percent at $14.40 an ounce.
Palladium climbed 0.6 percent to $1,169.10 per ounce, while platinum rose 0.2 percent to $854.60 per ounce.