London: Gold rose for a second day on Tuesday as the dollar weakened on lower expectations of a US Federal Reserve interest rate hike this year.
Spot gold was up about 0.7 per cent at $1,348.86 an ounce at 0639 GMT. The metal rose 0.2 per cent on Monday.
US gold rose 0.5 per cent to $1,354.70 an ounce.
“The gold market is in the balance of long and short buyers.
Both sides are waiting for more economic data to determine the trend,” said Jiang Shu, chief analyst at Shandong Gold Group.
“Most investors are not very aggressive as they are not certain about which road they should choose.”
Markets will look to US data later in the day including consumer prices, housing starts and industrial output for another chance to gauge the health of the economy.
Spot gold may revisit its Aug. 12 low of $1,333.50 per ounce, as it could have completed a bounce from this level, Reuters technical analyst Wang Tao said.
“Initial resistance for gold is at the important $1,350 level, whilst first support comes in around $1,335-1,336,”/stranding firm MKS Pamp said in a note.
Central bankers and governments must come up with new policies to buffer their economies against persistently low interest rates that threaten to make future recessions deeper and more difficult to avoid, San Francisco Fed President John Williams said.
The dollar hit a one-month low against the yen on Tuesday, staying on the defensive after recent US economic data were seen likely to limit the prospects of a near-term Fed interest rate hike.
The dollar index was down 0.6 per cent to $95.091 against a basket of currencies.
A stronger dollar discourages gold buying by making the metal more expensive in other currencies.
Asian shares rose to one-year highs, expanding their gains this year to 10 per cent, supported by a jump in oil prices and investor expectations of an extended phase of easy monetary policy around the globe.
Soros Fund Management LLC sharply cut its shares in gold in the second quarter, while New York-based Paulson & Co, led by John Paulson, kept its stake in SPDR Gold Trust unchanged, US
Securities and Exchange Commission filings showed on Monday.
Silver was up 1.2 per cent at $20.03 an ounce.
Platinum, which hit a near three-week low of $1,105.50 earlier in the session, was up 1.7 per cent at $1,126.40.
Palladium was up about 0.5 per cent at $697.20. It hit a three-week low of $679.72 on Monday.
