Investing.com - Gold futures rose in early Europe trading on Tuesday, snapping a five-session losing streak which took prices to the lowest level in more than five-months as the U.S. dollar pulled back from a one-year high.
Gold for December delivery on the Comex division of the New York Mercantile Exchange tacked on $4.95, or 0.4%, to $1,226.55 a troy ounce by 2:55AM ET (07:55GMT), after falling to $1,211.00 a day earlier, a level not seen since June 3.
Also on the Comex, silver futures for December delivery rose 9.0 cents, or 0.53%, to $16.98 a troy ounce during morning hours in London, bouncing back after dropping to $16.62 on Monday, the lowest since June 8.
The U.S. dollar weakened against a basket of major currencies on Tuesday, with investors locking in profits after a recent rally that drove the greenback to the strongest level since December 2015.
The dollar index was recently down 0.3% at 99.75 during early trade, after climbing to 100.24 on Monday.
Dollar weakness usually benefits gold, as it boosts the metal's appeal as an alternative asset and makes dollar-priced commodities cheaper for holders of other currencies.
Market analysts warned that the outlook for gold remains cloudy in the near-term. Prices of the yellow metal are down more than 6% over the past week amid optimism that increased fiscal spending and tax cuts under a Trump administration will spur economic growth and inflation, which would ultimately lead to an era of higher interest rates.
Investors are currently pricing an 81.1% chance of a rate hike at the Fed's December 13-14 meeting, according to Investing.com's Fed Rate Monitor Tool.
The precious metal is sensitive to moves in U.S. rates, which lift the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar in which it is priced.
Market players are looking ahead to U.S. economic data later in the session for further hints on the strength of the economy.
Retail sales, import prices and the Empire State survey are released at 8:30AM ET (13:30GMT), while business inventories are out at 10:00AM ET (15:00GMT).
There are also a flurry of Fed speakers Tuesday, ahead of Fed Chair Janet Yellen's congressional testimony Thursday.
Boston Fed President Eric Rosengren is due to speak at 8:00AM ET (13:00GMT), Fed Governor Daniel Tarullo at 9:05AM ET (14:05GMT), Fed Vice Chair Stanley Fischer at 1:30PM ET and Dallas Fed President Rob Kaplan also at 1:30PM ET (18:30GMT).
Elsewhere in metals trading, copper futures retreated 6.6 cents, or 2.62%, to $2.455 a pound, dropping from a 17-month peak of $2.734.
Prices of the red metal rallied nearly 11% last week amid expectations that a Donald Trump presidency could unleash a flood of infrastructure spending.
Copper is regarded as a leading indicator of the global economy. It is used in the construction of buildings, power generation and transmission and the manufacture of consumer electronics.