Bengaluru — Gold prices made modest gains on Thursday, after touching their lowest level this year on Wednesday.

Thursday’s rise came thanks to geopolitical uncertainty and a slightly weaker dollar.

Spot gold had risen 0.25% to $1,293.43 an ounce by 2.55am GMT, after marking its lowest since December 27 in the previous session at $1,286.20.

US gold futures for June delivery were 0.1% higher at $1,292.80 an ounce.

The dollar slipped against major rivals on Thursday after it hit a year-to-date peak overnight, while the euro hovered near a five-month low on concern that political developments in Italy could cause wider disruptions in the common currency bloc.

"The tug-of-war between risk appetite and dollar strength will be key in determining how gold may move," OCBC analyst Barnabas Gan said.

"We have already seen some potential safe-haven buying … given the potential breakdown in US-Pyongyang talks, despite a stronger greenback," Gan said.

US President Donald Trump acknowledged on Wednesday that it was unclear whether his summit with North Korea would go ahead, after Pyongyang threatened to pull out of the unprecedented meeting.

Gold prices can gain during times of uncertainty as the metal is seen as a safe place to park assets.

However, surging US bond yields are weighing on the metal, with the yield on the benchmark 10-year note hitting its highest level since 2011 on signs the economy is strengthening.

"Further gold weakness cannot be fully discounted, as the stronger US Treasury yields seen could garner more dollar strength into the month ahead," Gan said.

A stronger dollar makes dollar -denominated gold more expensive for holders of other currencies, while higher US bond yields weigh on the appeal of nonyielding bullion.

In other precious metals, silver was up 0.4% at $16.41 an ounce, after touching the lowest in two weeks at $16.17 in the previous session.

Platinum was up 0.5% at $892.30 an ounce, after hitting a five-month low of $883.50 on Wednesday.

Palladium rose 0.3% to $986.15 an ounce.