Picture: 123RF/REALROCKING
Picture: 123RF/REALROCKING

Bengaluru — Gold inched lower on Tuesday, trading in a tight range ahead of a US holiday, but the metal held above the $1,220 level as the dollar was pressured by weak US economic data and a clouded outlook for interest rates.

Spot gold inched 0.2% lower to $1,221.26 an ounce at 4.22am GMT.

US gold futures were down 0.3% at $1,222.10/oz.

"The market is very quiet today and appears to be in a holiday mood ahead of the US Thanksgiving," said Peter Fung, head of dealing at Wing Fung Precious Metals in Hong Kong.

"The dollar has come under some pressure, giving some support to gold."

The dollar index, which measures the greenback against a basket of six major currencies, was trading near a low of more than a week that it hit in the previous session.

The currency came under pressure as US Federal Reserve officials cautioned on the global growth outlook and weak data at home, pointing to a potentially slower pace of rate hikes.

The Fed is still expected to raise interest rates again next month and three times next year, but a strong majority of economists polled by Reuters over the past week say the risk is that it will slow that pace down.

"The Feds have changed the landscape to a more dovish terrain, suggesting that they too are turning a little bit risk-averse," Stephen Innes, Asia-Pacific trading head at Oanda in Singapore, said in a note.

"Great signal for gold prices which should see the dollar struggle into year-end while gold will continue to feed off Brexit and trade war risk."

A weaker greenback makes dollar-denominated gold cheaper for holders of other currencies.

Spot gold may test a support at $1,211/oz, a break below which could cause a loss to $1,202, said Reuters technical analyst Wang Tao.

Meanwhile, holdings SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 0.16% to 760.86 tons on Monday.

Among other precious metals, silver slipped 0.7% to $14.33/oz.

Palladium was up 0.2% at $1,164.49/oz, while platinum slipped 0.7% to $847.30/oz.

Reuters