But despite some immediate cooling in the Ukraine conflict, geopolitical worries were likely to keep gold at around $1,300, analysts said.
"If it were not for the problems we are seeing, between the United States and Russia, with Europe and Ukraine caught in the middle, in the seas surrounding China, and in the Middle East, gold probably would be down around $1,240 - $1,280 at present," Jeffrey Christian, managing partner of New York-based CPM Group, told the Reuters Global Gold Forum.
"Regional conflicts, like ISIS in Iraq, or Syria, or the Israeli-Palestinian situation, or the Ukraine separatists situation all fester without a joint international effort to help resolve them. This means more problems being more difficult to resolve, which probably means that more investors will seek gold as a portfolio diversifier and safe haven over the next several years than otherwise," Christian said.
One thing that could work against gold is sluggish demand from jewelry makers and other physical users of the precious metal, traders said. Physical demand across Asia remained subdued on Tuesday as they had been in recent weeks, after the softer gold prices earlier in the year sparked strong buying.
On the Shanghai Gold Exchange, local gold prices were on par with London rates, indicating muted buying.
--By Reuters. For more information on precious metals, please click here.