March 27 (Reuters) - Gold prices rose for a third straight
session on Tuesday as the dollar languished near a five-week
low, as investors eyed rising tensions between Russia and the
West even as a U.S.-China trade spat appeared to ease.
Spot gold was up 0.16 percent at $1,355.19 per ounce
at 0739 GMT, after touching $1,356.66 earlier in the session,
its highest since Feb. 16.
U.S. gold futures for April delivery were flat at
$1,355 per ounce.
"Gold prices continue to ratchet higher as the U.S. dollar
weakens despite equity markets rebounding on easing concerns
about the likelihood of a trade war between China and USA,"
Stephen Innes, APAC trading head at OANDA, said in a note.
"Realistically there are plentitudes of market turmoil in
the making that continue to make gold the go-to place to hedge
risk."
Against a basket of six other major currencies, the dollar
index was flat at 88.998. The index fell to an over
five-week low of 88.942 earlier in the day.
Asian share markets rallied on Tuesday with a revival of
investor appetite for riskier assets as reports of talks between
the United States and China rekindled hopes a damaging trade war
could be averted.
Gold, which is sought as a store of value in times of
political and financial uncertainty, becomes less expensive when
the greenback weakens.
On Monday, gold prices rose to a more than five-week high
after the United States said it would expel 60 Russian
diplomats, joining governments across Europe in punishing the
Kremlin for a nerve agent attack on a former Russian spy in
Britain.
Russian Deputy Foreign Minister Sergei Ryabkov said on
Tuesday that Moscow would respond harshly to the U.S. decision,
but was still open to strategic stability talks with Washington,
the RIA news agency reported.
Analysts also see the yellow metal being supported by last
week's statement from the U.S. Federal Reserve which forecast at
least two more hikes for 2018 instead of the three that many had
expected.
"The Federal Reserve's March meeting emerged as a turning
point for gold," analysts at UBS said in a note.
UBS on Monday raised its three-month forecast range to
$1,300-$1,400 per ounce, and six- and 12-month forecasts to
$1,375.
Holdings of SPDR Gold Trust , the world's largest
gold-backed exchange-traded fund, fell 0.38 percent to 847.30
tonnes on Monday from 850.54 tonnes on Friday.
In other precious metals, spot silver was up 0.7
percent at $16.77 per ounce after hitting a near 3-week high of
$16.80 earlier in the session.
Platinum was up 0.6 percent at $957.49 per ounce,
while palladium was 0.4 percent higher at $978.
