Mubasher: Gold prices stabilised on Tuesday as the US dollar mired near a one-month low after the US and Mexico made a trade deal.

However, concerns surrounding an on-going trade dispute between Washington and Beijing, kept a lid over prices for the precious metal.  

At 7:11 am GMT, spot gold ticked up 0.1% to $1,212.33 per ounce (oz), after declining earlier as much as 0.3%, as US gold futures went up 0.2% to $1,218.40 per ounce.

These prices came as the US dollar index inched down 0.1%.  

By 10:33 am GMT, spot gold rose 0.20% to $ 1,213.78 per ounce, as gold futures climbed 0.35% to $ 1,220.20 per ounce. The dollar index went down 0.14% to 94.6480 at 10:42 am GMT.

On Monday, the prices for precious metal hit their highest level since two weeks, as the trade deal between the US and Mexico to overhaul the North Atlantic Free Trade Agreement (NAFTA) weighed on the greenback.

Although “the trade escalation with China will play favourably into the US dollar as a risk aversion trade,” the market is still generally nervous “when it comes to buying into a weaker US dollar narrative,” Singapore-based futures brokerage OANDA Asia-Pacific trading head Stephen Innes told Thomson Reuters.

However, gold pared some losses after tapping one-year-and-a-half lows on 16 August at 1,159.60 per ounce, as the US dollar’s run lost momentum after US President Donald Trump took aim at the Fed’s interest rate hikes.

“Unless the Fed takes the December rate hike off the table, gold does not have a chance to get near any of those supportive levels,” Innes added.