By Nithin ThomasPrasad
REUTERS - Gold steadied on Tuesday after hitting its highest in about a week, supported by demand for safe-haven investments amid lingering tensions over the Korean peninsula.
Spot gold was nearly unchanged at $1,310.01 per ounce at 0636 GMT, after earlier marking its highest since Sept. 20 at $1,313.54. It gained over 1 percent in the previous session.
U.S. gold futures for December delivery rose 0.2 percent to $1,313.70 per ounce.
"The sharp sell-out in the equity market and rising risk aversion (are driving up gold prices)," said Richard Xu, a fund manager at China's biggest gold exchange-traded fund, HuaAn Gold.
North Korea's foreign minister said on Monday that a weekend tweet by President Donald Trump counted as a declaration of war on North Korea.
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"Gold will continue to be headline-driven in the short term," said Jeffrey Halley, a senior market analyst with OANDA.
Gold is used as an alternative investment during times of political and financial uncertainty.
Asian shares withered and the yen firmed against the backdrop of rising tensions on the Korean Peninsula, and as investors awaited fresh signals about the U.S. monetary policy outlook. [MKTS/GLOB]
Investors awaited a speech on "inflation, uncertainty, and monetary policy" by U.S. Federal Reserve Chair Janet Yellen, in Cleveland at 1645 GMT.
On Monday, Minneapolis Fed President Neel Kashkari said there was no need for the Fed to raise interest rates further as he sees no evidence recent weak inflation data is set to improve.
"Chinese real estate developers getting hit pretty badly (on Monday) because of the curbing of property sales and the downgrade of China's sovereign rating are also causing people to rethink their risky positions," said Xu at HuaAn Gold.
China and Hong Kong shares fell on Monday, led by property stocks after some cities imposed new housing controls to hose down an overheated market. They were also weighed down by Standard & Poor's downgrade of China's sovereign credit rating last week.
Spot gold may test support at $1,252 in three months, a break below which could trigger a further drop towards the next support level at $1,174, Reuters technical analyst Wang Tao said.
Meanwhile, silver was little changed at $17.18 per ounce. In the previous session, prices rose over 1 percent to register their biggest intra-day percentage gain since Sept. 7.
Platinum climbed 0.4 percent to $943.70 per ounce, after also registering its biggest one-day percentage gain since Sept. 7 in the previous session.
Palladium rose 0.8 percent to $917.90 per ounce.
(Reporting by Nithin Prasad and Arpan Varghese in Bengaluru; Editing by Richard Pullin and Joseph Radford)
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