Mubasher: Gold prices traded lower earlier on Tuesday as the dollar firmed up ahead of the scheduled trade talks between the US and China, according to Reuters.
By 4:44 am GMT, spot gold retreated by 0.2% to $1,491.05 per ounce, while US gold futures fell by 0.5% to $1,496.40 per ounce.
However, by 9:47 am GMT, spot gold rose by 0.5% to $1,501.40 per ounce, while gold futures nudged up to $1,505.10 per ounce.
High-level trade negotiations are set to resume on Thursday, when Chinese Vice Premier Liu He will be meeting with US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchi.
As “the market is very vulnerable to headlines, any further news on discussions in the US with negotiators in China could be very important,” CMC Markets chief strategist Michael McCarthy was quoted by Reuters.
Caution gripped the market as expectations of a trade deal dimmed after the US put Chinese security firms on trade blacklist over China’s treatment of predominantly Muslim ethnic minorities and President Donald Trump dismissed the possibility of a quick trade deal with Beijing.
This boosted the dollar overnight, which makes bullion more expensive for holders of non-US currencies, and in turn could curb demand.
The US dollar index, which traces the greenback against a basket of six key rivals, ticked down to 98.9320.
The talks are due to proceed before a planned hike in US tariffs on $250 billion worth of Chinese goods to 30% from 25% on 15 October.
President Trump said that the tariff hike will be implemented if the talks does not yield progress.