BENGALURU: Gold prices hovered near 10-month highs on Tuesday as optimism around U.S.-China trade discussions dimmed the dollar’s appeal, while palladium struck a record high on supply concerns.
Spot gold slipped 0.2 percent to $1,323.81 per ounce as of 0448 GMT. The metal had touched $1,327.64 an ounce in the previous session, its highest since April 25.
U.S. gold futures rose 0.4 percent to $1,326.8 an ounce.
A new round of talks between Beijing and the United States to resolve their trade spat will take place in Washington later in the day, with follow-up sessions at a higher level in the course of the week.
U.S. President Donald Trump had said last week he might extend the March 1 deadline for a deal and keep tariffs on Chinese goods from rising.
The dollar index against its peers was a shade weaker at 96.881. U.S. financial markets were closed on Monday for Presidents’ Day.
Also supporting gold prices is the U.S. Federal Reserve’s dovish approach to monetary policy tightening, which reduces the cost of holding gold, said John Sharma, an economist with National Australia Bank.
Gold prices have gained 3.3 percent so far this year on hopes that the world’s two largest economies will hammer out a trade deal and on expectations the Fed will pause its cycle of interest rate hikes.
Minutes of the Fed’s last policy meeting are due on Wednesday and should provide more guidance on the likelihood of rate increases this year.
Meanwhile, a coalition of 16 U.S. states led by California sued Trump’s administration on Monday over his decision to declare a national emergency to obtain funds for building a wall along the U.S.-Mexico border.
Amongst other precious metals, palladium notched a fresh peak of $1,471 an ounce.
A supply deficit in the market has boosted demand for the autocatalyst metal, in the backdrop of stricter emissions standards.
Silver fell 0.4 percent to $15.73 per ounce and platinum rose 0.2 percent to $803.50 per ounce, after touching $807.5 earlier in the session, its highest since Feb. 6.