Gold holds near two-week low as dollar and equities rise

BENGALURU, May 21 (Reuters): Gold fell on Tuesday, hovering near a more than two-week low touched in the previous session, as the dollar strengthened and improved risk appetite took the sheen off bullion ahead of the release of minutes from the US Federal Reserve's latest policy meeting.

Spot gold eased by 0.1 per cent to $1,276.01 an ounce by 1010 GMT, having slipped as low as $1,273.22 on Monday.

US gold futures were also down 0.1 per cent at $1,275.50.

"Right now the only safe-haven out there seems to be the dollar, which has been moving higher against most currencies," said Saxo Bank commodity strategist Ole Hansen.

"Also, there has been a slight improvement in the outlook for the stock markets after the US decided to provide Huawei with a 90-day reprieve."

Both factors were weighing on gold, he added.

The dollar index rose to its strongest in nearly a month, boosted by higher US yields and as fears of the economic fallout from the US-China trade row prompted investors to choose the safety of the US currency over bullion.

This pointed to a repeat of a similar trend last year when the dollar emerged as the go-to hedge against the simmering trade war, stemming flows into gold.

Stocks markets, meanwhile, gained after Washington temporarily eased trade restrictions imposed on China's Huawei.