Gold futures marked a third straight session of gains on Tuesday, buoyed by a weaker U.S. dollar and uncertainty surrounding U.S. reaction to a possible chemical-weapons attack in Syria.
Prices for the precious metal climbed even as global investors piled back into riskier assets, such as U.S. stocks, after comments out of China soothed trade-war fears.
"The weaker U.S. dollar, which is softer after news from China on lowering trade tariff tensions, is leading to a slight uptick in gold," said Jeff Wright, chief investment officer at Wolfpack Capital.
"Inflation numbers, [with] PPI a little higher than anticipated, have dented momentum but not turned gold negative," he said. Wholesale-level inflation edged higher for a third month in a row, a reading that likely keeps modest interest-rate tightening by the Federal Reserve in the cards for 2018.
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June gold GCM8, -0.33% rose $5.80, or 0.4%, to settle at $1,345.90 an ounce, marking its highest settlement since April 2, according to FactSet data tracking the most-active contracts.
The ICE U.S. Dollar Index DXY, -0.01% which measures the greenback against six major rivals, fell by 0.2% to 89.668, which helped supported dollar-denominated prices of gold.
Still, stock trading was the primary mood-setter. A global equity rally followed Chinese President Xi's pledge at the Boao Forum that Beijing is developing plans to give foreign companies greater access to financial and manufacturing sectors. These include a cut in tariffs on car imports and an improvement in protection of intellectual property, among other measures.
The Trump administration has threatened tariffs on up to $150 billion of Chinese products, which Beijing has answered with levies of its own and vows to not yield to U.S. pressure.
Overall, geopolitical uncertainty is keeping a floor under range-bound gold. For one, the U.S. is preparing for a possible military strike against Syrian President Bashar al-Assad over a suspected chemical-weapons attack that killed civilians. "It will be met, and it will be met forcefully-when, I will not say," President Donald Trump said Monday evening, ahead of a meeting with senior military leaders.
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As for Syria, "a U.S. military response could lead to safe haven interest and possibly return gold towards $1,350 area pretty quickly," Wright said. "All depends on proportionality to U.S. response if there is one; and depth as President Trump indicated he wants to pull U.S. presence out of Syria ASAP."
In other metals trading, May silver SIK8, -0.58% used both for industrial purposes and as a haven financial asset, rose 0.4% to $16.596 an ounce.
In exchange-traded funds, the SPDR Gold Shares GLD, +0.78% gained 0.1%. The iShares Silver Trust SLV, +0.45% climbed 0.4%, while the VanEck Vectors Gold Miners GDX, +2.20% climbed 1.6%.
Meanwhile, copper for May deliveryHGK8, -0.14% gained 2% to $3.137 a pound on the Comex division of the New York Mercantile Exchange.
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July platinum PLN8, +0.10% eased 0.7% to $933.10 an ounce, while June palladium PAM8, -0.24% settled at $949.75, up 1.9% in volatile trading so far this week after a more than 7% decline suffered last week.