Investing.com - Gold prices were flat Tuesday despite a broad bounce in metal prices as the dollar rally paused.
Gold futures for August delivery on the Comex division of the New York Mercantile Exchange fell by $0.30, or 0.02%, to $1,225.30 a troy ounce, but remained above intraday lows of $1,218.20.
Gold prices remained under pressure, however, as traders continue to bet there is further room for the dollar to advance as strong GDP data due Friday could strengthened the Federal Reserve's case to continue rate hikes.
The U.S. dollar index, which measures the greenback against a trade-weighted basket of six major currencies, fell by 0.02% to 94.40. The dollar index had traded as low as 94.17 intraday.
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 lifts the opportunity cost of holding gold as it pays no interest.
The broader metals market traded higher amid easing trade-war tensions, but analysts warned a slowdown in China – rather than trade-war concerns – was the "dominant driver" of moves in the market. They added that the moves in the Chinese yuan served as a proxy for fears about a slowdown in the world's second-largest economy.
"While we see mounting trade tensions between the United States and China as the initial trigger, we believe that growing fears of a slowdown in China, not primarily because of the tensions but rather because of tightening credit, have become the dominant driver as of late," Analysts at Julius Bear said in an email to clients.
"These fears are also reflected in a sharply depreciating Chinese yuan (CNY). The co-movement between the metals and the yuan has hardly been stronger than recently," they added.
Copper prices rose 2.06% to $2.80, while zinc prices rose 1.99% to 2,603.00.
Aluminium prices rose 0.93% to 2,082.75, while Nickel futures rose 1.81% to 13,615.00.
Silver futures rose 0.49% to $15.50 a troy ounce, while platinum futures rose 0.65% to $836.20.