Gold on Tuesday pared losses to scale a one-week peak as Wall Street eased from record highs on U.S. political uncertainties and somber earnings, while markets awaited more cues on the Federal Reserve's monetary policy.
"For people trading gold they want more insight to the path forward and where the Fed is at. With equities trading lower, gold is getting a little bit of a lift based off that," said Bob Haberkorn, senior market strategist at RJO Futures.
Financial markets eased as underwhelming earnings and concerns on the ongoing impeachment inquiry against President Donald Trump overshadowed hopes for a U.S.-China trade deal.
Earlier in the session, Washington granted an extension for U.S. companies to continue doing business with China's HuaweiTechnologies Co Ltd , a move markets took as a sign of progressing U.S.-China trade relations. After adding Huawei to an economic blacklist in May, the U.S. Commerce Department has allowed it to purchase some American-made goods, and granted a new 90-day extension to minimize disruption for its customers.
This prompted Wall Street to open at a record high, and stocks globally raced to a 22-month peak and pushed bullion to the day's low of $1,464.20.
"The fact that gold has been stable within an environment with equity markets driving to new highs ... is a testament that there is still interest in safe haven assets," David Meger, director of metals trading at High Ridge Futures said, attributing it to concerns about economic growth and lingering doubts about a trade deal.
In the previous session, a report that Beijing was not as optimistic about a deal, owing to Trump's reluctance to roll back tariffs, had pushed gold into positive territory. However, assumptions that a "phase one" trade deal could be reached soon outweighed any creeping doubts, with gold shedding about 2.5% so far this month.
Market participants were now awaiting the minutes from the Fed's latest policy meeting, where the U.S. central bank had cut interest rates for the third time this year.
Other precious metal prices rose, with silver up 0.6% at $17.12 per ounce, platinum gaining 1.8% to $909.59 and palladium was up 1.8% at $1,769.44 an ounce.