BENGALURU, Oct 02 (Reuters): Gold rose on Tuesday as a recent dip to multi-week lows attracted some bargain hunters, but prices were well within recent ranges as the dollar remained on an upward trajectory.
Spot gold rose 0.4 per cent to $1,192.43 per ounce at 0926 GMT, after shedding around 0.3 per cent in the previous session. US gold futures were 0.4 per cent higher at $1,196.10.
"It is unusual that gold is trading higher even with the stronger dollar. People are looking to buy into gold as they believe that prices below $1,200 are indeed attractive," Julius Baer analyst Carsten Menke said.
A higher dollar makes bullion more expensive for holders of other currencies, curtailing demand.
Gold prices have fallen for the past six months, losing 13 per cent, largely due to dollar strength, with the US currency benefiting from a vibrant U.S. economy and fears of a global trade war.
Market participants are also on the lookout for any additional clues on the pace of interest rate hikes from US Federal Reserve Chairman Jerome Powell, who will be speaking on "The Outlook for Employment and Inflation" before the National Association for Business Economics later in the day.
"In the gold market, there is no evidence that the bulls have gained any strength. Of course, the main economic data which has the ability to move the gold price needle substantially is the upcoming U.S non-farm payrolls on Friday," Think Markets UK chief markets analyst Naeem Aslam said in a note.
The Fed raised rates last week and said it planned four more increases by the end of 2019 and another in 2020, citing steady economic growth and a robust jobs market.
Rising interest rates boost the greenback by increasing the opportunity cost of holding gold.
The negative sentiment in gold has led to liquidations in gold-backed exchange traded funds, with holdings of SPDR Gold, the largest gold ETF falling over four million ounces since a peak in April. On Monday, SPDR holdings fell 0.3 per cent.
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