LONDON: Gold firmed after three days of losses on Tuesday as the dollar stabilised off an earlier three-month peak and a rise in US Treasury yields stalled, with lower prices tempting some buyers back to the market.

Gold has slid nearly 2 per cent in the last three trading sessions as a rally in US yields towards the 3pc mark pushed the dollar index to its highest since mid-January, making the metal more attractive to price-sensitive buyers. Spot gold was up 0.1pc at $1,325.81 an ounce at 1142 GMT, while US gold futures for June delivery were up $3.70 an ounce at $1,327.70.

“There are still a lot of risks out there that could flare up at any time,” Capital Economics analyst Simona Gambarini said. “There might be some investors who hadn’t bought insurance before who think now is a good time to get in.”

Gold is often seen as a safe store of value in times of elevated geopolitical or financial risk. It has benefited in recent weeks from concerns over the US-China trade dispute, sanctions on Russia and unrest in the Middle East, but has been kept in check by the prospect of further interest rate hikes from the Federal Reserve.

“Based on interest rates, prices should be lower,” Gambarini said. “But there are a lot of other factors, and a lot of tensions that have been boosting prices... we think gold will continue to trade in this range between $1,300-1,350 depending on what happens with those risks, and the Fed hiking rates.”

Autocatalyst metal palladium was down another 1pc at $968.25 an ounce, having plunged 5pc on Monday.

Published in Dawn, April 25th, 2018