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Spot gold was steady at $1,314.30 per ounce, as of 0546 GMT.

U.S. gold futures were also steady at $1,318.20 an ounce.

·       Trump spoke in the chamber of the House of Representatives facing political discord over his demands that Democrats end their opposition to funding for a border wall he says is needed to stem illegal immigration and smuggled drugs.

“There is a likely risk of another government shutdown with President Trump still sticking to the rhetoric of erecting a border wall,” said Hitesh Jain, vice president, Yes Securities, adding that a firmer dollar was capping gold’s gains.

“Market participants remain cognizant of the fact that global macro numbers are slowing. Gold as an investment avenue remains very much in the reckoning.”

·       Trump’s demand for $5.7 billion in funding for a U.S.-Mexico border wall triggered a historic 35-day partial government shutdown, which ended on Jan. 25.

Trump has threatened to resume the shutdown if he is dissatisfied with the negotiations.

·       The dollar index stood near a two-week high.

·       Meanwhile, Dallas Federal Reserve President Robert Kaplan said on Tuesday that the Fed should leave interest rates where they are until the U.S. economic outlook is clearer, a process that in his view could take several more months.

The U.S. central bank last week promised to be “patient” in rate moves due to impending slowdown and uncertain trade backdrop.

·       While Trump’s address did not have anything significant on U.S-China trade front, senior U.S. and Chinese officials are poised to start another round of trade talks in Beijing next week, according to sources.

Trump has vowed to increase tariffs on $200 billion worth of Chinese imports to 25 percent from 10 percent currently if the two sides cannot reach a deal by 12:01 a.m. (0501 GMT) on March 2.

·       “For a very short term, the narrowing of trading range (in gold) is possible because the better-than-expected U.S. non-farm payroll makes it less likely for the Fed to be accommodative,” Wing Fung said in a research note.

·       Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, dropped 0.18 percent on Tuesday. Holdings have dropped for three straight sessions.

·       Liquidity remained low as China and several other markets in Asia still closed for the Lunar New Year holiday.

·       With Chinese markets closed for the country’s New Year celebration, Commerzbank lists a number of statistics to show the state of the country’s gold market. The bank cites data from the China Gold Association showing that the nation’s demand grew by 5.7% to1,151 tonnes last year. “As such, growth was significantly lower than a year earlier,” Commerzbank says. “Though demand increased, supply decreased by almost 6%. For years, China has been using imports to plug the gap. Last year, Hong Kong and Switzerland were the main suppliers.” Commerzbank notes that the gold demand reported by the China Gold Association is almost 200 tonnes higher than the one from the World Gold Council. “That said, the WGC’s figure does not include China’s industrial gold demand, which grew sharply last year,” Commerzbank says. “This year, it expects Chinese gold demand to remain largely unchanged at 950-1,000 tonnes.”