NEW YORK/LONDON: Gold turned positive on Wednesday as the US dollar weakened against a basket of major currencies after hopes grew of concessions by Canada that would resolve disputes over reworking the North American Free Trade Agreement.
Spot gold was up 0.8 percent at $1,206.94 per ounce by 1:37 p.m. EDT (1737 GMT), after hitting its lowest since Aug. 24 at $1,187.21 on Tuesday. US gold futures for December delivery settled up $8.70, or 0.7 percent, at $1,210.90 per ounce.
The US dollar index faded against a basket of major currencies as news emerged that Canada was ready to offer the United States limited access to the Canadian dairy market as a concession in negotiations to rework the North American Free Trade Agreement.
"The dollar is significantly weaker against major currencies today and commodities are supported across the board. Any type of resolution in the agreement is going to support those currencies," said David Meger, director of metals trading at High Ridge Futures.
A trade conflict between Washington and Beijing had earlier prompted investors to buy the US dollar in the belief that the United States has less to lose from the dispute.
Gold has lost out to the dollar in a battle for safe-haven flows. A firmer dollar makes gold more expensive for holders of other currencies.
The dollar index touched a three-week high of 95.74 last week.
In addition, a sell-off in the Chinese yuan made the metal more expensive for buyers from the world's top consumer of the metal.
But Wednesday's reversal in the greenback made gold less expensive for holders of other currencies.
Meanwhile, the US central bank is widely expected to raise benchmark interest rates at its September meeting and expectations are growing for one more hike in December on positive economic data.
Higher rates increase bond yields, making non-yielding bullion less attractive, and tend to boost the dollar, in which gold is priced.
Central bank meetings in Turkey and Russia this week are also on investors' radar, with a particular market focus on whether Ankara will step in to fight inflation and a depreciating currency, Commerzbank analyst Daniel Briesemann said.
Gold has fallen more than 10 percent from a peak in April, under pressure from rising US interest rates amid intensifying global trade tensions.
Spot silver increased 0.9 percent at $14.21 per ounce, having touched $13.90 in the previous session, its lowest since January 2016.
Platinum gained 1.5 percent at $799 per ounce, while palladium was up 0.2 percent at $976.30 an ounce.
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