Investing.com - Gold prices swung between small gains and losses in North American morning trade on Tuesday, steadying near the prior session's three-month high as rising global political uncertainty supported safe-haven demand.
Gold for April delivery on the Comex division of the New York Mercantile Exchange tacked on 25 cents, or less than 0.1%, to $1,232.45 a troy ounce by 9:20AM ET (14:20GMT), after rallying $11.30, or almost 1%, a day earlier.
Prices of the yellow metal touched $1,237.50 on Monday, the most since November 11.
Investors were largely focused on French politics, as far-right National Front leader Marine Le Pen launched her presidential bid over the weekend, vowing to fight globalization and take France out of the euro zone.
Apart from France, market players also have to factor in elections in other parts of the European Union this year. Dutch elections are in March followed by Germany in September. In Italy, another presidential election looms, even as former Italian prime minister Matteo Renzi said he was willing to shelve his push for early voting.
Traders also eyed political risk elements in the U.S., with President Donald Trump's administration on the back foot over its immigration and other policies.
Headlines from Washington will continue to dictate market sentiment as traders focus on Trump for further details on his promises of tax reform, infrastructure spending and deregulation as well as trade policies.
Investors often buy gold as a refuge against economic and political uncertainty.
Gains were limited due to a stronger U.S. dollar, as dollar-priced commodities become more expensive to investors holding other currencies when the greenback gains.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.7% at 100.53 in early trade, pulling away from last week's two-month low of 99.19.
The dollar was boosted after Philadelphia Federal Reserve Bank President Patrick Harker on Monday said he would be open to raising interest rates again at the U.S. central bank's March meeting if growth in jobs and wages continues.
Fed fund futures priced in a less than 10% chance of a rate hike in March, according to Investing.com’s Fed Rate Monitor Tool. However, odds of a June increase was seen at more than 60%.
The Fed, which raised rates in December, has forecast three rate increases this year. However, traders remained unconvinced, with markets continuing to price in just two rate hikes during the course of this year.
Also on the Comex, silver futures for March delivery shed 4.5 cents, or 0.25%, to $17.64 a troy ounce.
Meanwhile, platinum dipped 0.5% to $1,009.45, while palladium dropped around 1% to $767.03 an ounce.
Elsewhere in metals trading, copper futures inched down 1.1 cents, or 0.4%, to $2.640 a pound.