Spot gold was 0.1 percent higher at $1,298.86 per ounce by 0349 GMT. U.S. gold futures for June delivery were nearly unchanged at $1,298.80 per ounce.
· Rising political uncertainty in Italy and growing U.S.-China trade tensions should see gold holding a bid, said Stephen Innes, APAC trading head at OANDA.
"But with the yellow metal's sensitivity to the U.S. dollar on full display, it is unlikely gold will move significantly higher until we reach the EU 'Crisis Zone' which we are nowhere near at this stage."
· The dollar index, which measures the greenback against a basket of six major currencies, hovered near its 6-1/2 month peak touched in the previous session.
· Investors fear that repeat elections in the euro zone's third-largest economy - which could come as soon as July - may become a de-facto referendum on Italian membership of the currency bloc and the country's role in the European Union.
· In other precious metals, spot silver was down 0.1 percent at $16.34 an ounce.
· Platinum fell 0.3 percent to $901.20 an ounce and
· palladium was 0.5 percent lower at $974.05.
· Gold prices struggled to find direction as haven-seeking capital flows buoyed the US Dollar and Treasury bonds in tandem, weighing on yields. That put the yellow metal’s appeal as an anti-fiat alternative and its role as benchmark non-interest-bearing asset in conflict.
Gold prices remain stuck between the outer layer of trend support set from December 2016, now at 1290.05, and a falling trend line guiding the move lower from mid-April (1302.13). A daily close below support exposes the 1260.80-66.44 area next. Alternatively, a reach of resistance at sees the next major inflection point at 1323.60, a former support level.
· Gold prices struggled to find direction as haven-seeking capital flows buoyed the US Dollar and Treasury bonds in tandem, weighing on yields. That put the yellow metal’s appeal as an anti-fiat alternative and its role as benchmark non-interest-bearing asset in conflict.
Gold prices remain stuck between the outer layer of trend support set from December 2016, now at 1290.05, and a falling trend line guiding the move lower from mid-April (1302.13). A daily close below support exposes the 1260.80-66.44 area next. Alternatively, a reach of resistance at sees the next major inflection point at 1323.60, a former support level.
Overnight index swaps are not pricing in a better-than-even chance of 90.2% that the RBA will raise rates once by June 2019
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