Investing.com - Gold prices pulled away from two-week lows on Tuesday, but struggled to make headway as a stronger dollar continued to weigh on demand for bullion.
Gold futures for June delivery on the Comex division of the New York Mercantile Exchange were up $3.80 or 0.29% to $1,328.00 a troy ounce by 04:34 AM ET (08:34 AM GMT).
Gold plumbed a two-week low of $1,323.80 on Monday and ended the day down 0.64%.
Prices remained under pressure from the broadly stronger dollar, which was holding steady near seven week highs against a basket of the other major currencies, boosted by rising Treasury yields.
The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, hit a high of 90.84, its highest since March 1 and was last at 90.77.
A stronger dollar makes dollar-denominated commodities, including gold, more expensive for holders of other currencies.
The yield on 10-year U.S. Treasury notes hit its highest in more than four years at 2.998% on Monday, as strengthening inflation prospects added to expectations for a faster rate of interest rate hikes from the Federal Reserve this year.
The yield later backed off that level and was last at 2.957%.
Higher interest rates are a negative for gold as the precious metal, which does not pay interest, struggles to compete with yield-bearing assets when rates rise.
Gold, which is often sought by investors as a store of value in times of market turmoil and political uncertainty and tends to decline as investor confidence returns, has weakened in recent sessions as worries over geopolitical risks and trade tensions waned.
In other precious metal trade, silver futures were up 0.47% to $16.66 a troy ounce, while platinum futures dipped 0.11% to trade at $921.40.
Among base metals, copper futures added on 0.95% to trade at $3.140 a pound.