Mubasher: Gold prices steadied earlier on Tuesday, but a strong US dollar kept a lid on gains for the precious metal, which had support from worries of a global economic weakness.

At 7:33 am GMT, spot gold remained stable at $1,279.68 per ounce, after hitting 1,276.31, its lowest level in three weeks, in the previous session, while US gold futures went down 0.3% to $1,279.40 per ounce.

However, by 8:14 am GMT, spot gold went up 0.08% to $1,283.60 per ounce, as gold futures rose 0.29% to $1,284.13 per ounce.

The US dollar index, a tracker of the greenback against a basket of six major peers, touched a 2-week high. The gauge rose 0.05% to 96.3860.

“Gold has become a victim of a stronger greenback in the short term,” IG Markets analyst Kyle Rodda told Thomson Reuters, adding that A weaker euro and concerns around growth in Europe have given a leg up to the dollar, pushing gold prices down below key level of $1,280.”

“We haven’t seen much of data coming out of U.S. recently due to the government shutdown,” Rodda said, noting that “if we see weaker data that could cause bond yields to fall and support gold.”

An economic slowdown in China has offered further support to the US dollar.

The world’s second largest economy grew slower in the final quarter of last year, under pressure from stuttering domestic demand and US tariffs, sending the overall annual growth to the lowest level in 28 years.

Moreover, Asian equities dropped on Tuesday on concerns about global economy after the International Monetary Fund (IMF) lowered its growth forecast for this year and next.

 “It seems that several factors boosting gold earlier in January now seem to be having no effect, namely, the far more dovish Fed statements and clearer signs of slowing global macro growth,” INTL FCstone analyst said in a note.