Mubasher: Gold prices retreated on Tuesday, but remained above their lowest level in more than two weeks in the prior session, Reuters reported.

The metal’s safe-haven appeal was taken over by the dollar on increasing wagers that the US Federal Reserve will not cut interest rates this year.

At 8:22 am GMT, spot gold fell by 0.19% to $1,275.36 per ounce, after tapping $1,273.22, a more than two-week low, while US gold futures declined by 0.14% to $1,275.50 per oucnce.

The dollar stood close to its highest level in two weeks and a half on Tuesday, as higher US yields and escalating trade tensions between the US and China lent support, boosting the greenback’s safe-haven appeal.

“The dollar strength is starting to re-emerge because the Fed really hasn’t been as dovish as market participants are looking for,” DailyFX analyst David Song was quoted by Reuters.

At 8:29 am GMT, the US dollar index, which gauges the greenback against six major rivals, climbed by 0.19% to 98.12.

 As long as the data continue to align generally with Fed’s expectations, the US central bank will stay reluctant to end its monetary tightening cycle, Song said.

“Gold, which is generally considered a safe-haven asset, has shrugged most news of escalating tensions, much to the bulls’ dismay,” Reuters said, citing analysts.

It was believed that the dollar has mimicked its characteristics from last year, when it was more attractive for investors who sought hedge against a trade conflict.