SINGAPORE: Gold was trapped in a narrow range above $1,300 an ounce on Tuesday as equities gained ground, with investors appearing to set aside for now geopolitical worries concerning Ukraine.
Spot gold slipped 0.1 percent to $1,306.41 an ounce by 0254 GMT, and was trading in a $3 range early in Asia. US gold slipped $2.60 to $1,307.90.
Asian shares edged higher tracking rallies in the United States and Europe.
"Gold will likely remain on the defensive given the current geopolitical backdrop, coupled with the fact that equity markets seem to be finding something of a bid," said INTL FCStone analyst Edward Meir.
A stronger dollar could also have some impact on prices, although geopolitical variables were likely to be more influential, Meir said.
Gold has gained about 9 percent this year, largely on tensions between the West and Russia over Ukraine, and violence in the Middle East. The metal is seen as an alternative investment to riskier assets such as equities.
President Vladimir Putin said on Monday Russia is sending an aid convoy to eastern Ukraine despite urgent Western warnings against using humanitarian help as a pretext for an invasion.
With Ukraine reporting Russia has massed 45,000 troops on its border, NATO said there was a "high probability" that Moscow could intervene militarily in the country's east, where Kiev's forces are closing in on pro-Russian separatists.
Meanwhile, Israeli and Palestinian negotiators resumed indirect talks mediated by Egypt to end a month-old Gaza war, after a new 72-hour truce held for a day.
Iraq's president named a new prime minister to end Nuri al-Maliki's eight-year rule on Monday, but the veteran leader refused to go after deploying militias and special forces on the streets, creating a dangerous political showdown in Baghdad.
Other than geopolitical factors, gold has been unable to draw support from elsewhere. Physical demand in top consuming region Asia has been sluggish after a record year in 2013, while investors have been cutting positions in SPDR Gold Trust, the world's largest gold-backed exchange-traded fund.
Global economic data has also been strong, dulling gold's appeal as a safe haven asset.
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