Gold rose on Tuesday on growing fears of a coronavirus resurgence in some countries and prospects of Sino-US tensions flaring further, though gains were capped by a stronger dollar.
Spot gold was up 0.4% at $1,702.69 per ounce by 0804 GMT. US gold futures climbed 0.5% to $1,705.90 per ounce.
The new wave of infections is "priced through the fact that markets are looking at negative (US) interest rates," ANZ analyst Daniel Hynes said, adding that the market was expecting some additional support from the Federal Reserve.
However, "we have (also) had a little bit of a rally in the US dollar which certainly crimps investor appetite."
Market participants are increasingly becoming anxious about a second wave of infections as more countries around the world gradually ease restrictions in an effort to restart their economies.
"The US-China trade issues are back into the picture," said Hareesh V, head of commodity research at Geojit Financial Services.
Japan could end a state of emergency in many regions this week if new virus infections are under control.
Meanwhile, SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings fell 0.05% to 1,081.07 tonnes on Monday.
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