SINGAPORE: Bullion edged higher due to physical buying on Tuesday, holding near a 1-week peak touched in the previous session, but more outflows from gold exchange-traded funds summed up investors' weakening confidence in the metal.
Investors were still licking their wounds after gold notched its biggest-ever daily loss in dollar terms last Monday in a brutal sell-off which took many ardent gold investors and bulls by surprise.
Gold rose $2.72 an ounce to $1,427.86 by 0317 GMT, well below a lifetime high of around $1,920 in 2011. Prices sank to around $1,321 on April 16, its lowest in more than 2 years, and gold has dropped around 15 percent this year.
"From a technical stand point, there are still downside risks to gold prices. I suspect we haven't really seen the market turning around to be bullish in gold prices just yet," said CIMB regional economist Song Seng Wun.
US gold futures for June delivery stood at $1,427.50 an ounce, up $6.30.
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