NEW YORK/LONDON - Gold prices were steady on Wednesday, see-sawing in a narrow range as a weaker dollar and trade tensions provided support but investor anticipation of a U.S. rate hike from the Federal Reserve next week weighed on prices.
Spot gold <XAU=> was flat at $1,295.80 per ounce by 1:50 p.m. ET (17:50 GMT). U.S. gold futures <GCcv1> for August delivery settled down 80 cents, or 0.1 percent, at $1,301.40 per ounce.
"Investors are sitting on the fence, they only want to be involved when we break out of the range," said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.
Gold was trapped between a ceiling at the 200-day moving average at around $1,308 and $1,286 on the downside, he added.
The case for hiking U.S. interest rates next week was bolstered on Tuesday by upbeat U.S. data.
Gold, a non-interest-paying asset, could see demand take a hit from higher rates. Traders said a rate hike could boost the dollar, which would pressure gold. [.DXY]
"Strength in the dollar index could push the gold price back toward the $1,280 mark," said ThinkMarkets chief market analyst Naeem Aslam.
On Wednesday, a softer greenback supported dollar-denominated gold after the euro rose to a 10-day high when European Central Bank officials said an end to the bank's bond-buying program by the end of 2018 was plausible. [USD/]
Potential gold investors were waiting to see how trade tensions play out since many believe recent U.S. tariffs are negotiating tactics, analysts said.
"Investor interest is mixed towards gold in the current environment, with geopolitical tensions attracting reduced flows and limiting the downside risk rather than propelling prices higher," Standard Chartered said in a note.
More upcoming events could affect gold markets, said John Caruso, senior market strategist at RJO Futures.
"There's some anxiety going into next week with the Kim Jong Un summit Tuesday," Caruso said.
"Thursday, a pivotal European Central Bank meeting will discuss the timeline on exiting their quantitative easing. A lot of things out here could be a boon for gold traders."
Silver <XAG=> gained 1.2 percent to $16.65 per ounce, earlier hitting $16.74, its highest since May 14.
Platinum <XPT=> added 0.2 percent to $902 an ounce and palladium <XPD=> gained 2.2 percent at $1,015.75, earlier climbing to a six-week high of $1,024.90.
"Technical levels have been broken through the $1,010 level in spot palladium," said Walter Pehowich, executive vice president of investment services at Dillon Gage Metals, adding the next level of resistance is $1,057.