Bengaluru: Gold prices climbed for a second day on Tuesday, buoyed by an easing US dollar and physical buying in Asia.
Spot gold was up 0.3% at US$1,217.35 an ounce by 0628 GMT. The previous day, it advanced 0.4% to snap three sessions of losses.
US gold futures were up 0.64% at US$1,217.50 per ounce, after earlier rising as high as US$1,220.90.
?Gold prices have factored in the December (US rate hike) move. Now it is a matter of bargain-hunting," said Spencer Campbell, general manager with Kaloti Precious Metals in Singapore.
?We are seeing a lot of activity in South-East Asia. The drop in prices and inverse pricing against the local currency are driving the buying."
Gold has fallen more than US$120 an ounce from its post-US election peak on Nov 9 as US Treasury yields posted their biggest two-week rise in more than five years and the dollar shot higher.
But the US dollar weakened on Tuesday, supporting bullion.
The dollar index, which measures the greenback against a basket of major currencies, slipped 0.15% to 100.910, falling further after snapping a 10-day rising streak on Monday.
?Gold kept its head above water, with technical-based buying supporting the market. However, with the market increasing bets on a December rate hike in the US, this buying is unlikely to persist in the short term," ANZ analysts said in a note.
Gold is highly-sensitive to rising interest rates which lift the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar, in which it is priced.
"?We still expect gold to struggle against a host of bearish elements that remain arrayed against it, including a stronger dollar, soaring equity markets and the prospect of further rate hikes that could follow the widely-expected increase slated for next month," INTL FCStone analyst Edward Meir said in a note.
The world's largest gold-backed exchange-traded fund, SPDR Gold Trust, said its holdings fell 0.71% to 908.77 tonnes on Monday. Holdings have fallen 3.6% so far this month.
Goldman Sachs on Monday lowered its three and six-month gold price forecasts to US$1,200 per troy ounce and said downside risks remain from potential physical ETF liquidation.
Spot gold may test resistance at US$1,222 per ounce, a break above which could lead to a gain to US$1,235, according to Reuters technicals analyst Wang Tao.
Silver rose 1.3% at US$16.77 an ounce and platinum was 1.3% higher at US$947.00.
Palladium was up 0.93% at US$734.90, after earlier touching its strongest since Aug 10 at US$736.20. - Reuters
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