By Sethuraman N R
(Reuters) - Gold prices held steady on Tuesday as investors kept a cautious stance ahead of a fresh round of Sino-U.S trade talks, while a firmer dollar capped gains for the bullion, which was drawing support from global economic slowdown worries.
Spot gold was firm at $1,309 per ounce, as of 0605 GMT, after falling 0.4 percent in the previous session.
U.S. gold futures were also mostly unchanged at $1,312.70 per ounce.
"Gold is being pushed around by the U.S. dollar in the near term. Traders are getting out of anything to do with Europe on concerns of weakness in the region and going for safe-haven buying into U.S. treasuries, which is pushing up the dollar," said Kyle Rodda, market analyst, IG Markets.
When investors buy U.S. Treasury bonds, they are also required to purchase the greenback, which makes dollar-denominated gold more expensive for holders of other currencies, potentially subduing demand.
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"Gold is still very resilient and should trade in the range of $1,305 to $1,320, with investors looking for headlines around trade talks, U.S. government shutdown and data from United States and China for signs of weakness in the economy," Rodda said.
New round of trade talks between China and the United States started in Beijing on Monday with world's two largest economies trying to hammer out a deal before a March 1 deadline, after which U.S. tariffs on $200 billion worth of Chinese imports are scheduled to increase to 25 percent from 10 percent.
Sino-U.S. trade tensions have rattled financial markets since last year and also underpinned the dollar's safe-haven appeal.
The dollar index was steady at 97.05, after advancing 0.4 percent in the previous session in its largest percentage gain since Jan. 24.
"Ongoing trade tensions and concerns about weaker global economic growth continue to provide a level of support in the gold market," ANZ analysts said in a research note.
Meanwhile, U.S. congressional negotiators said late on Monday they had reached a tentative deal on border security funding that would avert another partial government shutdown due to start on Saturday, but provided no details.
Investors are worried about the economic impact of U.S. government shutdown when global growth is already lean.
Among other metals, palladium rose 0.5 percent to $1,392 per ounce, while silver inched up 0.2 percent to $15.74.
Platinum rose 0.6 percent to $786 per ounce. In the previous session, the metal touched $779.50, its lowest since Jan. 2.
(Reporting by Nallur Sethuraman in Bengaluru; Editing by Subhranshu Sahu, Sherry Jacob-Phillips and Rashmi Aich)
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
