LONDON: Gold prices were steady on Tuesday but poised for gains as investors awaited potential US action against the suspected use of chemical weapons in Syria as well as more trade friction.
“Geopolitics is taking the main driving seat this week, so gold has potentially got some room for the upside,” said Jonathan Butler, commodities analyst at Mitsubishi in London.
“A lot will hinge on what is happening geopolitically between Russia, Syria, Iran and all sorts of other countries that could be potentially drawn into this.”
Spot gold was barely changed, down 0.01 per cent at $1,335.73 (Dh4,906) an ounce at 1005 GMT, having risen to a near one-week high of $1,338.12 earlier in the session.
US gold futures dipped 0.1 per cent to $1,339.10 an ounce.
If gold breaks through resistance of $1,340, it could move back to the late March highs just under $1,360, Butler added.
Trump on Monday promised quick, forceful action in response to a deadly suspected chemical weapons attack in Syria, appearing to suggest a potential military response.
Gold is often seen as an alternative investment during times of political and financial uncertainty.
Gold slipped from its intraday peak on Tuesday after Chinese President Xi Jinping promised to lower import tariffs on certain products, helping soothe fears over an escalating trade row with the United States.
Xi promised to open the country’s economy further and lower import tariffs on products including cars. His comments sent US stock futures, the dollar and shares higher.
This dampened the appeal of gold, which is priced in dollars, as investors’ appetite for risky assets surged.
“The risk-aversion demand in the past few weeks has been very positive for gold, but I don’t think what President Xi has been saying is going to affect gold that much,” said Mark To, head of research at Hong Kong’s Wing Fung Financial Group.
Markets are looking ahead to this week’s Federal Reserve’s minutes on its last policy meeting and US CPI data for cues on the pace of interest rate hikes this year.
In other precious metals, silver gained 0.2 per cent to $16.48 an ounce.
Platinum shed 0.4 per cent to $928 an ounce, after gaining about 2 per cent in the previous session, the most in nearly two months.
Palladium rose 0.1 per cent to $930.72 an ounce. The auto catalyst metal gained over 3 per cent on Monday, its biggest daily percentage rise since Jan. 12.