Gold pushed above its settlement in afternoon trading on Tuesday, pushing toward $1,350, a day after the metal had its strongest one-day rally in more than a year.
With a lack of U.S. economic news, the metal moved in a narrow $11 trading range following its 3 percent gain on Monday, when it hit a one-month high and vaulted back over a technical threshold at $1,300 an ounce.
Liquidation continued from gold-backed ETFs, with outflows in the gold funds tracked by Reuters totaling 10 tons on Monday.
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The world's largest, the SPDR Gold Trust, reported a 1.2 ton drop in its holdings. "Given the ongoing ETF outflows, we believe it is still too early to describe this (latest rise in gold prices) as a lasting trend reversal," Commerzbank analysts said in a note.
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ETF bleed continues
Spot gold was recently trading up 0.6 percent to $1,343 an ounce above the one-month high of $1,338.91 reached on Monday. U.S. gold futures for August delivery had settled $1.30 lower at $1,334.70. But were pushing higher and nearing $1,350.
Outflows from gold ETFs, which issue securities backed by physical stocks of bullion, have averaged 20 tons a week this year, Reuters data shows.
Investors say they want to see outflows steady before buying back into gold. Analysts said losses in the metal were limited by short covering as futures investors, anticipating the start of delivery period on August contracts, rolled positions from August to December.
The delivery period begins July 31. Consumption in the world's No. 1 gold buyer, India, is expected to be cut by moves on Monday by India's central bank to tighten gold imports, increasing the country's dependence on exports.
Among other precious metals, silver was down 1.2 percent at $20 an ounce, having risen 5 percent on Monday. Spot platinum eased 0.2 percent to $1,438 an ounce, while palladium was down 1.1 percent at $736 an ounce.