Gold gains as dollar declines

LONDON, May 22 (Reuters): Gold edged up on Tuesday from a 2018 low, adding traction as the dollar fell off its five-month high, though risk appetite in the broader financial markets kept the precious metal's gains in check.

The dollar lost momentum following a broad rally prompted by rising U.S. bond yields and the prospect of a resolution to U.S.-China trade tensions. A weaker dollar makes dollar-priced gold cheaper for non-U.S. investors.

Washington and Beijing both claimed victory on Monday as the world's two largest economies stepped back from the brink of a global trade war and agreed to hold further talks to boost U.S. exports to China.

"This quarter and maybe going into next, gold will continue to struggle but the (positive) views on the U.S. economy are overdone," said Philip Newman, director at Metals Focus.

"There are concerns over sizeable U.S. debt, there's the (U.S.) mid-term elections in November, there's enough out there that could see the dollar eventually weaken and gold prices start to improve through the back end of this year."

Spot gold had edged up 0.2 per cent to $1,294.81 per ounce by 1011 GMT. In the previous session, it slid to $1,281.76, its lowest since Dec. 27.

US gold futures for June delivery rose 0.3 per cent to $1,294.30 per ounce.

Gold, seen as a safe haven, tends to weaken when there is strong investor appetite for equities, seen as risky assets.