Gold rose on Tuesday as investors sought cover from global uncertainties including the US-China trade dispute, while silver latched on to bullion's rally to breach the $18 an ounce mark for the first time in nearly two years.
gold rose 0.3% to $1,531.06 per ounce as of 1413 GMT.
gold prices shed nearly $30 from a high of $1,554.56 it hit on Monday, a level last seen in April 2013, after US President Donald Trump said negotiations with China on the long-drawn tariff war have resumed.
gold futures for December delivery rose 0.2% to $1,540.70.
While Trump's comments that China had offered to resume trade talks assuaged some concerns in the wider financial markets, uncertainty prevailed as Beijing declined to confirm the assertion. [MKTS/GLOB]
"We continue to have concerns about the global economy. The US President's deal with China is pending and that may be the rhetoric from the White House as opposed to an actual fact pointing to negotiation," said Bart Melek, head of commodity strategies at TD Securities in Toronto.
"We have a target of $1,586 for
gold. There is a very good probability we will get there, not far in the distant future."
The trade war between the world's two largest economies has roiled markets since it began more than a year ago, triggering fears of a global economic slowdown. This helps
gold, often considered a safer place to park assets during times of global uncertainty.
Adding to uncertainty over the health of the global economy, data showed Germany's economy contracted on weaker exports in the second quarter. Also, U.S. home price growth cooled to its slowest in seven years.
gold, the dollar eased, making the metal cheaper for investors holding other currencies. [USD/]
Gold is a strategic asset, from a risk-adjusted returns perspective, so amid heightened economic and geopolitical risk, we see it benefiting from its safe-haven status," analysts at ANZ bank said in a research note.
Meanwhile, markets priced in a quarter-point cut in interest rates by the US Federal Reserve next month, and over 100 basis points of easing by the end of next year. Lower US interest rates put pressure on the dollar and bond yields, increasing the appeal of non-yielding bullion.
Elsewhere, silver extended gains for a third straight session, hitting its highest since September 2017.
"WhenPlatinum climbed 0.5% to $859.62 while palladium rose 0.4% to $1,479.48.
gold does really well and gets quite expensive investors on the margin will move into silver... not a big surprise that silver is doing well," TD Securities' Melek said.