Investing.com – Gold prices found their footing Tuesday as a rout of the dollar and falling U.S. bond yields drew support for the yellow metal, and helped platinum prices bounce from 9-and-a-half-year lows.
Gold futures for August delivery on the Comex division of the New York Mercantile Exchange rose by $12.40 or 1.01%, to $1,254.20 a troy ounce.
The yellow metal's fall to a nearly seven-month low of $1,238.80 attracted a fresh wave of buying pressure as demand for the safe-haven trade returned as China and U.S. are set to implement tariffs on Friday.
The Trump administration's tariff on a range of Chinese goods worth about $34 billion is expected to come into effect on Friday. While China's 25% tariff will also take effect Friday on $34 billion of U.S. goods.
Dollar weakness also supported the yellow metal's advanced as the prospect of a global trade war pressured U.S. bond yields.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, fell by 0.31% to 94.31.
Gold is sensitive to moves higher in both bond yields and the U.S. dollar – A stronger dollar makes gold more expensive for holders of foreign currency while a rise in U.S. rates, lift the opportunity cost of holding gold as it pays no interest.
The softer dollar also triggered a sharp turnaround in Platinum Futures as they rebounded from 9-and-a-half-year lows to trade 3.69% higher at $843.40 an ounce.
The rebound in platinum prices, however, could be short-lived amid expectations that the precious metal could came under pressure as a global trade war would hurt demand, while the additional U.S. interest rate hikes would also sour sentiment.
In other precious metal trade, silver futures rose 1.42% to $16.06 a troy ounce.
Copper prices fell 0.88% to $2.92.