Mubasher: Gold prices stayed near 10-month highs on Tuesday, buoyed by investor optimism about US-China trade talks that dented the dollar’s appeal.

At 9:26 am GMT, spot gold added 0.22% to $1,329.79 per ounce, while US gold futures grew 0.75% to $1,332.00 per ounce.

Meanwhile, palladium recorded a fresh hike of $1,475.5 per ounce on supply concerns, surging around 17% so far this year.

Progress signs in Washington-Beijing discussions had slashed appetite for the greenback, which in return has been boosting the yellow metal.

By 9:28 am GMT, the US dollar index, a gauge for the greenback against six major peers, went down 0.04% to 96.8670.

The US and China are to resume trade talks in Washington later in the day that will greatly ease their bruising trade dispute.

“If there is progress in trade talks there will be increasing appetite for emerging-market currencies, and the US dollar will weaken,” Argonaut Securities analyst Helen Lau told Reuters.

On Friday, US President Donald Trump reiterated that he might extend a 1 March deadline for a deal and halt further tariffs on Chinese goods.

Along with trade deal hopes, forecasts that the US Federal Reserve will pause its round of interest rate hikes have also lent support to spot gold prices, which rose around 3.3% so far this year.

The Fed will release minutes of its January policy meeting on Wednesday that will provide more guidance on the likelihood or not for rate hikes this year.

“Gold prices have inched up and consolidated above $1,325. Softer economic prospects are likely to put some pressure on interest-bearing assets,” Benjamin Lu, an analyst with Singapore-based Phillip Futures, told Reuters.

Among other precious metals, silver dropped 0.5% to $15.72 per ounce while platinum grew 0.4% to $804.96 per ounce, after registering $807.5 earlier in the session, its highest level since 6 February.