Gold prices rose on Tuesday, hitting their highest in nearly a week as the U.S. dollar weakened and investors awaited potential U.S. action against suspected use of chemical weapons in Syria.
President Donald Trump on Monday promised quick, forceful action in response to a deadly suspected chemical weapons attack in Syria, appearing to suggest a potential military response.
"Geopolitics is taking the main driving seat this week, so gold has potentially got some room for the upside," said Jonathan Butler, commodities analyst at Mitsubishi in London. "A lot will hinge on what is happening geopolitically between Russia, Syria, Iran and all sorts of other countries that could be potentially drawn into this."
Spot gold was up 0.34 percent at $1,340.44 an ounce by 4:01 p.m. ET, its highest since April 4. June U.S. gold futures settled up $5.80 at $1,345.90 per ounce. Gold is often seen as a store of value during times of geopolitical and economic uncertainty.
Gold got a boost as the dollar index dipped to a two-week low against a basket of currencies. The dollar had risen earlier after Chinese President Xi Jinping's promise to cut import tariffs eased concerns about a trade conflict.
Jinping's comments spurred a rally in global equity markets, that capped gold's safe haven appeal despite the weakening dollar, said Bob Haberkorn of RJO Futures in Chicago. "The upside has been limited due to the fact that China appears to be offering some concessions to the trade war," he said. He said gold could move higher if trade tensions re-escalate or if bullion reaches $1,350, near the top end of its latest trading range.
Silver gained 0.8 percent at $16.58 an ounce. The session high was $16.65, a one-week high. Platinum fell 0.7 percent at $925 an ounce, while palladium rose 2.07 percent at $948.72 an ounce, after touching $961.30, a 12-day high.
Platinum fell back to a discount to palladium, after rising to a premium last Thursday. Last September, palladium gained the upper hand over platinum for the first time in 16 years.
"We are not convinced the platinum-palladium ratio can hold consistently above parity this year as strong trends in the auto sector which have weighed on the ratio remain in place," UBS analyst Joni Teves said in a note.
Diesel vehicles use mostly platinum in catalytic converters while petrol cars largely use palladium, but diesel sales in Europe's largest car markets have been falling.
Correction: Gold futures settled at $1,345.90 per ounce. A previous version of this story misstated the number.